Indian Wells City Council
January 30, 2025

INDIAN ,, W€LLS

CALIFORNIA

CITY COUNCIL
Revised Meeting Agenda
Thursday, January 30, 2025
10:30 AM
City Hall Council Chamber
44950 Eldorado Drive, Indian Wells, CA 92210
Welcome to a meeting of the Indian Wells City Council.

Live Stream: Regular meetings held in the City Hall Council Chamber are streamed live.

You can watch the meeting on any device or computer. Members of the public who wish to listen or watch the meeting may access the livestream during the regular meetings.

LIVE STREAM CLICK HERE.

Public Comments: Members of the Public who wish to speak should fill out a blue slip and submit it to the City Clerk, comments are limited to 3 minutes. In accordance with State Law, remarks during public comment are to be limited to subjects within the City's jurisdiction. If you are unable to provide comments during meeting, written comments on agenda or non -agenda items or both, may be submitted at [email protected] an hour prior to the start of the meeting.

Notification: If you are an individual with a disability and need a reasonable modification or accommodation pursuant to the Americans with Disabilities Act (ADA) please contact the City Clerk at 760-346-2489, 48 hours prior to the meeting.

Please turn off all communication devices (phones) or put them on non -audible mode (vibrate) during Council proceedings. All documents for public review are available for public inspection at City Hall reception, 44-950 Eldorado Drive, Indian Wells during normal business hours.

Pages

A. CONVENE THE INDIAN WELLS CITY COUNCIL, PLEDGE OF

ALLEGIANCE AND ROLL CALL

MAYOR BRUCE WHITMAN

MAYOR PRO TEM DANA REED

COUNCIL MEMBER TOPER TAYLOR

COUNCIL MEMBER BRIAN PENNA

COUNCIL MEMBER GREG SANDERS
B. APPROVAL OF THE FINAL AGENDA
C. PROCLAMATIONS AND PRESENTATIONS
C.1 Proclamation Recognizing Linda Patterson
C.2 Recognition of Indian Wells Hotels for Efforts in Assisting Southern California Wildfire Victims
C.3 Riverside County Fire Department Update by Battalion Chief Matthew Kotz
C.4 Riverside County Sheriff Department Update by Indian Wells Lieutenant Frank Schiavone and Introduction of Special Enforcement Team Deputy Peter Prajin
D. PUBLIC COMMENTS
Members of the Public who wish to speak on consent items OR items not listed on the agenda may do so at this time. Public Comments are limited to 3 minutes. Speakers will be alerted when their time is up and are then to return to their seats and no further comments will be permitted.

Please note that while the City Council values your comments, the Council cannot respond nor take action on matters not listed on the agenda until the matter may appear on the forthcoming agenda.

E. CITY MANAGER'S REPORTS
The City Manager or Department Heads may make brief
announcements, informal comments, or brief the Council on items of interest.

F. CITY ATTORNEY REPORTS AND COMMENTS

G. CONSENT CALENDAR
All matters listed on the Consent Calendar are considered to be routine and will be approved by one motion. Reading of text of Ordinances is waived and Ordinances are adopted as second reading, by title only. There will be no separate discussion of these items unless members of the Council request specific items be removed from the Consent Calendar for separate discussion and action.

G.1 Annual Financial Report for the Fiscal Year Ending June 30, 2024 RECOMMENDED ACTIONS:

Council RECEIVES and FILES the City's Annual Financial Report for the fiscal year ending June 30, 2024; and,
12 FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

G.2 Re -Adoption of the City's Investment Policy 196
RECOMMENDED ACTIONS:

Council RE -ADOPTS the City's Investment Policy as presented; and FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

G.3 Annual Review of FPPC Gift Restrictions, City Ticket Distribution Policy Reporting Requirement and Updates
RECOMMENDED ACTIONS:

Council RECEIVES and FILES information report; and
FINDS the action exempt from CEQA review under CEQA Guidelines section 15061(b)(3).
220

G.4 Council Member Attendance at the 2025 Living Desert Event 253
RECOMMENDED ACTIONS:

Council APPROVES the attendance of Councilmember Sanders to attend the Living Desert Zoobilee Gala: Wild at Heart on February 22, 2025, as identified in the staff report; and
FINDS the action exempt from CEQA review under CEQA Guidelines section 15061(b)(3).

G.5 City Treasurer's Report for September 2024 255
RECOMMENDED ACTIONS:

Council RECEIVES and FILES the City Treasurer's Report for September 2024; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

G.6 City Treasurer's Report for October 2024 274
RECOMMENDED ACTIONS:

Council RECEIVES and FILES the City Treasurer's Report for October 2024; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

G.7 City Treasurer's Report for November 2024 293
RECOMMENDED ACTIONS:

Council RECEIVES and FILES the City Treasurer's Report for November 2024; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

H. PUBLIC HEARINGS
For each of the items listed under PUBLIC HEARING ITEMS, the public will be provided an opportunity to speak. After a staff report is provided, the Mayor will open the public hearing. At that time the applicant will be allowed five (5) minutes to make a presentation on the case. Members of the public will then be allowed three (3) minutes each to speak, unless there are a number of person's wishing to speak and then the Mayor will allow only two (2) minutes, to accommodate for more persons.

H.1
The City Council may ask the speakers questions relative to the case and the testimony provided. The question period will not count against your time limit. After all persons have spoken, the applicant will be allowed three minutes to summarize or rebut any public testimony. The Mayor will then close the public hearing portion of the hearing and deliberate the matter.

Adoption of an Addendum to the Coachella Valley Association of Governments' Transportation Uniform Mitigation Fee (TUMF) And Adopt the TUMF Inflation Adjustment and Revised Fee Schedule for Calendar Year 2025
RECOMMENDED ACTIONS:

Council HOLDS a notice consolidated public hearing and receive public testimony; and
ADOPTS Resolution approving an Addendum to the Coachella Valley Association of Governments Transportation Uniform Mitigation Fee (TUMF) 2018 Fee Schedule Update Nexus Report and Adopting the Coachella Valley Association of Governments Executive Committee's TUMF inflation Adjustment and Revised Fee Schedule for Calendar Year 2025 Applicable to all Developments in the City of Indian Wells; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060. 312

I. GENERAL BUSINESS
I.1
The Mayor will call upon the members of the public to address the Council regarding the agenda item being considered. After the public has provided comment, the item is closed to further comment and brought to the Council for discussion and action.

Finance Committee Recommendation on Sponsorship for the Living Desert
RECOMMENDED ACTIONS:

Council REVIEWS and PROVIDES direction regarding the Finance Committee's recommendation for a funding request to the Living Desert Zoo in the amount of $2,000,000, to be disbursed in two equal annual payments; and
RECOMMENDS the Finance Committee evaluate and propose
revisions to the City's Extraordinary Policy in light of this funding process; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

I.2 Review Design Recommendations for the Completion of Safer Streets Along Fairway and Eldorado Drive (Phase I)
RECOMMENDED ACTIONS:

Council EVALUATES and ADOPTS the recommended improvements for Fairway Drive and Eldorado Drive recommended by the Planning Commission; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080.17.
374
457

I.3 City Monument at Indian Wells Lane 475
RECOMMENDED ACTIONS:

Council APPROVES the conceptual design of the permanent City monument located on Indian Wells Lane at Highway 111; and APPROVES a preliminary project budget of $250,000 funded through the Arts in Public Places account; and
FINDS the project to be categorically exempt from the provisions of the California Environmental Quality Act (CEQA) as not a project pursuant to Section 15378.

I.4 Approval to Call a Fire Access Maintenance District (FAMD) Special Election to be held on May 6, 2025
RECOMMENDED ACTIONS:

Council APPROVES Fire Access Maintenance District No. 1 (FAMD) request calling for a Special Election to be held on May 6, 2025, for all registered voters in the FAMD; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

I.5 Indian Wells Preservation Foundation Partnership Funding Request RECOMMENDED ACTIONS:

Council REVIEWS and CONSIDERS the Finance Committee
recommendation to support the Indian Wells Preservation Foundation partnership request; and
APPROVES supplemental appropriation of $6,000 for Fiscal Year 2024-25 and thereafter every Fiscal Year $11,000; and
FINDS the action exempt from California Environmental Quality Act (CEQA) review under CEQA guidelines section 15061(b)(3). 482
492

I.6 Sponsorship for City of Indian Wells as a Host City Sponsor for Epson Tour Championship 2025 and 2026
RECOMMENDED ACTIONS:

Council REVIEWS and PROVIDES direction on the Finance
Committee's recommendation to continue serving as the Host City Partner for Epson Tour Championship for 2025 & 2026; and FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

I.7 Tennis Garden Sustainability Sponsorship Request
RECOMMENDED ACTIONS:

Council REVIEWS and PROVIDES direction on the Finance
Committee's recommended denial of the Tennis Garden
Sustainability Sponsorship Request; and
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

I.8 Indian Wells Support to those Impacted by Los Angeles County Wildfires
RECOMMENDED ACTIONS:

Council DISCUSSES and PROVIDES direction on opportunities to assist those impacted by the Los Angeles County Wildfires; and FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

J. COUNCIL MEMBER'S REPORTS AND COMMENTS
On their own initiative, Council Members may make a brief announcement or a brief report on their own activities. Council Members may ask a question for clarification, make a referral to staff, or take action to have staff place a matter of business on a future agenda. The Council may take action on items listed on the Agenda. 497
525
529

3.1 COUNCIL MEMBER SANDERS
Coachella Valley Animal Campus
Cove Communities Service Commission
Desert Sands Unified School District
Desert Recreation District
Indian Wells Marketing Committee
Indian Wells Finance & Legal Oversight Committee
Indian Wells Public Safety Committee

3.2 COUNCIL MEMBER PENNA
Coachella Valley Mountain Conservancy
Indian Wells Preservation Foundation
Visit Greater Palm Springs
Indian Wells Community Activities Committee
Indian Wells Grants In Aid Committee
Indian Wells Public Safety Committee
13 COUNCIL MEMBER TAYLOR
Riverside County Transportation Commission
CVAG Homelessness Committee
CVAG Public Safety Committee
CVAG Transportation Committee
Indian Wells Golf Resort Advisory Committee
14 MAYOR PRO TEM REED
Southern California Association of Governments
CVAG Conservation Commission
CVAG Energy & Sustainability Committee
Desert Recreation District
Indian Wells Marketing Committee
Indian Wells Finance & Legal Oversight Committee
Indian Wells Personnel Committee
Indian Wells Tee Committee

J.5 MAYOR WHITMAN
California Joint Power Insurance Authority (JPIA)
Coachella Valley Economic Partnership
CVAG Executive Committee
Cove Communities Services Commission
Desert Sands Unified School District
Indian Wells Golf Advisory Committee
Indian Wells Personnel Committee
Indian Wells Tee Committee
Sunline Transit Agency
K. CLOSED SESSION
Once the closed session has ended, the City Attorney or presiding officer will make any announcement required by the Brown Act relative to reportable actions taken during the closed session.

K.1 Conference with Legal Counsel Regarding Anticipated Litigation - Significant Exposure to Litigation pursuant to Government Code Section 54956.9(d)(2) (One or More (1) potential cases).

K.2 Conference with City's Real Property Negotiator Pursuant to Government Code 54956.8. Real Property: APN 633-150-071.

Negotiating Parties:

On Behalf of the City of Indian Wells: Christopher Freeland, City Manager. Other Negotiating Parties: BBC Esmeralda, LLC an Illinois Liability Company. Under Negotiation: Price and Terms of Payment.

K.3 Conference with Legal Counsel Regarding Existing Litigation, Pursuant to Government Code Section 54956.9(d)(1):

Matthew Parson, et al vs., City of Indian Wells et al., Riverside County Superior Court, Case No. RIC 1811999 City of Indian Wells v. Parsons, Riverside County Superior Court, Case No. PSC 2002870/App. Ct. No. APP1900132.

K.4 Conference with Legal Counsel Regarding Existing Litigation, Pursuant to Government Code Section 54956.9(d)(1):

City of Indian Wells, et al vs., Lissoy et al., Riverside County Superior Court (CVPS2204658).

*K.5 Conference with City's Real Property Negotiator Pursuant to Government Code 54956.8. Real Property: APN 633-350-015.

Negotiating Parties:

On Behalf of the City of Indian Wells: Christopher Freeland, City Manager. Under Negotiation: Price and Terms of Payment.

L. ADJOURNMENT
To a regularly scheduled meeting of the City Council to be held at 1:30 p.m. on February 13, 2025 in the City Hall Council Chamber.

Affidavit of Posting,
I, Angelica Avila, certify that on January 24, 2025, I caused to be posted a notice of a City Council Meeting to be held on January 30, 2025 at 10:30 a.m. in the City Hall Council Chamber.

Notices were posted at Indian Wells Civic Center and City's Website [ www.cityofindianwells.org]
eacev Avila/
An el�Avila, MMC, City Clerk
9

Presentation January 30, 2025
City Council Meeting
Indian Wells Fire Department
Quarterly Report
CAL FIRE/ Riverside County Fire Department
Battalion Chief Matthew Kotz
Oq.°

Presentation Outline
• Fire Department calls for service from 10/1/2024 to 12/31/2024. 1, . * _ iW ; +
• Comparison of calls from the previous quarterly period. • Significant Fire Department events in Indian Wells.

Fire Department Calls for Service
➢ Total number of calls: 376 *(345 calls for service in 2023) ➢ Medical: 251
➢ False Alarms: 53
➢ Public Service Assists: 26
➢ Traffic Collisions: 34
➢ Comparison of total number of calls same quarter in 2023: z+9%

DESERT
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LA QUIN

Incident Response Activity
*At least 1 Resource Dispatched
Incident Type #
False Alarm
Med[caI
Other Fire
Other Misc
public Service Assist
Rescue
Rincina Alarm
Standby
Traffic Collision
Incident Total
53 249
1 3
26 3
34 376
Average Enroute to On -Scene Time
*Units Responding Charlie, Delta, Bravo, Echo, Code 3
<5 NIinutes +5 Minutes
+10 Minutes
+20 Minutes
=nroute Time; Unit has been acknowledged as resµondirng.

Averacje Min
O to 5 Min

Fire Department Calls for Service at Indian
Wells Hotels
• Grand Hyatt: 8
• Renaissance Esmerelda: 12
• Tommy Bahama Miramonte Resort: 10
• Indian Wells Resort: 5

Significant Events in Indian Wells
Special Events:
➢ 2024 Ironman Event:

Total number of Fire Department related calls: 3
Total number of Fire Department transports: 2
Incident Response:
➢ High speed vehicle collision into a light pole at Highway 111 and Province Way. One person required extrication. Two patients were transported to a local a local area hospital, one patient was in critical condition, the other was in moderate condition.

Noteworthy Events Throughout the Quarter:
➢ Sport and Special Event Training at Indian Wells Tennis Garden. ➢ Participate in National Shakeout in October.
➢ Station 55 participated in Shop With A Firefighter.

Questions?

Oattor

GIVE YOUR HOME AND PROPERTY THE
BEST CHANCE OF SURVIVING A WILDFIRE.

HARDEN YOUR HOME.

CREATE DEFENSIBLE SPACE.
pORNIA DEPARTIRE
cAlroRY & FIRE PROTEcTtOF
KCAL
FIRE
SINCE 1885

DEFENSIBLE
SPACE

ACTIONS

1. Regularly clean your roof, gutters,
decks, and the base of walls to avoid
the accumulation of fallen leaves and other
flammable materials.

2. Remove all combustible materials from underneath,
on top of, or within five feet of your home.

Use lawn and leaf bags for collection.

3. Replace wood mulch products within
five feet of all structures with noncombustible
products such as dirt, stone, or gravel.

4. Store combustible outdoor furnishings,
retractable awnings, and umbrellas
away from your home when not in use.

5. Store exposed firewood at least 30 feet
away from structures or completely covered in
a fire-resistant material. Ensure a minimum
of 10 feet of clearance, down to bare mineral soil
in all directions, around wood piles.

6. Remove all dead or dying plant
materials within 30 feet of all structures
or to the property line.

For more info, visit
ReadyforWildfire.org

HIGH RISK

UNENCLOSED EAVES

DEFENSIBLE SPACE

NONCOMPLIANT

LOW RISK

ENCLOSED EAVES

DEFENSIBLE SPACE COMPLIANT

FLIP FOR MORE DETAILS

HOME

HARDENING

ACTIONS
Follow this best -practices guide to make your
home more ignition resistant when wildfire strikes.

1. Block any spaces between your roof covering and sheathing with noncombustible materials (bird stops).

2. Install a noncombustible gutter cover on gutters to prevent the accumulation of leaves and debris in the gutter.

3. Cover your chimney and stovepipe outlets with a noncombustible corrosion -resistant metal mesh screen (spark arrestor), with 3/8 inch to 1 /2 inch openings.

4. Install ember- and flame -resistant vents with
1 /16 inch to 1 /8 inch metal mesh.

5. Buy fire- and heat -rated caulking to plug gaps greater than 1 /8 inch around exposed rafters and blockings. This prevents ember intrusion into the attic or other enclosed spaces.

6. Inspect exterior siding for dry rot, gaps, cracks, and warping. Caulk or plug gaps greater than 1 /8 inch in siding and replace any damaged boards, including those with dry rot.

7. Install weather stripping to gaps greater than 1 /8 inch between garage doors and door frames to prevent ember intrusion.

The weather stripping must be compliant with UL Standard 10C.

8. When it's time to replace your windows, replace them with multipaned windows that have at least one pane
of tempered glass.

9. When it's time to replace your siding or deck, use
compliant noncombustible, ignition -resistant,
or other Office of the State Fire Marshal Wildland Urban Interface (WUI) Products.

10. Cover openings to operable skylights with noncombustible metal mesh screen with openings in the screen not to exceed 1 /8 inch.

11. Install a minimum of six-inch wide metal flashing, applied vertically on the exterior of the wall at the deck -to -wall intersection to protect the combustible siding material.

12. When it is time to replace your roof, replace it with a Class A fire -rated roof.

ACTION 2
ACTION 5

FLIP FOR MORE DETAILS

2025
Presentation January 30,
City Council Meeting
Riverside Sheriff - Indian Wells

Riverside Sheriff - Indian Wells
15,108 total file numbers drawn as of December 31, 2024 •
•
3,185 calls for service
1 1,923 self -initiated file numbers drawn
119 total arrests made
23 DUIs
11 Public intoxication
50 Warrant arrests
10,014 area checks were conducted

Riverside Sheriff - Indian Wells
Traffic Collisions Year -to -Date as of 12/31/24 = 194
0 Fatal
3 Major injury
23 Minor -injury
168 Non -injury
Traffic Citations Year -to -Date (2023): 1,191
Traffic Citations Year -to-.' ate (2024): 1,703
Percentage Increase:
23 DUI Arrests

Riverside Sheriff - Indian Well
Uniform Crime Reporting Data YTD Comparison as of 12/31/24 Crime 2022 YTD 2023 YTD 2024 YTD
Homicide
Rape
Robbery
Aggravated Assault
rip rip
V
io en rimes
Burglary
Auto Theft
Larceny*
Total Property Crimes
Total Part 1 Crimes
* Includes vehicle burglaries
0 0 0
2 1 2
1 1
5 3
1 7
26 19 14
8 2 5
4 68 50
116 79 -15.96% from 2023

Notable Cases/Operations
► 01/02/2025 - Deputy Galvan responded to 74813 Chateau Circle. He promptly contacted Indian Wells SET and provided a brief detail of this case. The next day, Indian Wells SET canvassed the property. They developed an investigative lead and subsequently reviewed video surveillance with the property management company. Flock cameras captured a vehicle consistent with the suspect vehicle and an electronic surveillance device was placed. While conducting undercover surveillance of the vehicle, deputies identified a potential suspect. On 01/28/2025, Indian Wells SET planned a takedown operation and search warrant service at the suspect's residence. The suspect was apprehended, and numerous items were seized during the search warrant service.

INDIAN WELLS CITY COUNCIL
January 30, 2025
To: City Council
From: Finance Department
Prepared by: Kevin McCarthy, Finance Director
Subject: Annual Financial Report for the Fiscal Year Ending June 30, 2024

RECOMMENDED
ACTION:

Council RECEIVES and FILES the City's Annual Financial Report for the fiscal year ending June 30, 2024; and,
FINDS the project to be exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to Section 15060.

SUMMARY:

The Finance Committee convened on January 14, 2025, to conduct a comprehensive review of the City's Annual Financial Report. Following this review, the Committee recommends that the City Council consider receiving and filing the Annual Financial Report as presented.

Davis Farr, the City's independent auditor, has issued an unqualified opinion on the Annual Financial Report for the fiscal year ending June 30, 2024. An unqualified opinion is the highest level of assurance that a municipality can achieve, affirming the accuracy and integrity of the City's financial statements.

As part of the audit process, the auditors evaluate the City's internal control systems and compliance with applicable laws and regulations. They also communicate any audit - related matters deemed significant to those responsible for overseeing the City's financial reporting.

BACKGROUND:

Government Code Compliance and Annual Financial Reporting Pursuant to Government Code 26909(a), the City, as a local agency of the County, is required to engage the services of a certified public accountant to conduct an annual audit of its financial

accounts and records. This audit must adhere to generally accepted auditing standards.

Additionally, under Government Code 26909(b), the resulting audit report must be submitted to the State Controller and the County Auditor within six months following the end of the fiscal year. Accordingly, this report has been prepared in full compliance with these statutory requirements for the fiscal year ending June 30, 2024.

The independent auditor's report is included in the financial section of the Annual Financial Report. Following the auditor's report, the Management's Discussion and Analysis (MD&A) provides a comprehensive narrative introduction, overview, and analysis of the City's financial statements. The MD&A serves as a complement to the transmittal letter and is best understood when reviewed in conjunction with it.

Residents are encouraged to review the City's Annual Financial Report, which is accessible via the City's official website at http://www.cityofindianwells.orq . The financial report will also be submitted to the Government Finance Officers Association (GFOA) for consideration for the Certificate of Achievement for Excellence in Financial Reporting. The City has been honored with this prestigious award annually since 1991, a testament to its commitment to transparency and excellence in financial reporting.

This award, conferred by the GFOA, recognizes government entities that demonstrate superior financial reporting practices, fostering accountability and trust among residents and stakeholders. Receiving the Certificate of Achievement underscores the City's dedication to accurate, transparent, and accessible financial communication.

Financial Transparency and Communication
Maintaining transparent and open communication with residents and stakeholders is a cornerstone of the City Council's goals and priorities. To ensure residents remain informed about the City's fiscal health, the Council employs the following strategies throughout the year:

1. Hosting City Council meetings and study sessions to promote public engagement.

2. Presenting the Financial Forecast during the annual Strategic Planning sessions.

3. Convening Finance Committee Meetings to provide detailed updates on financial matters.

4. Publishing the Annual Financial Statements.

5. Providing fiscal updates via the City's official website.

6. Issuing the Mayor's Letter to share key financial insights.

7. Sending periodic fiscal update e -blasts to residents.

8. Mailing the Financial Primer to all residents to simplify complex financial topics.

9. Sharing the Capital Improvements Overview through mailers.

10. Publishing the Indian Wells Checkbook online for public access.

11. Distributing the Budget at a Glance mailer to provide an accessible overview of the budget.

12.Offering resident meetings with the City's Finance Director for direct discussions.

13. Hosting Coffee with the City Manager sessions for informal engagement.

These initiatives underscore the City's commitment to fostering transparency, accountability, and public trust in its financial management practices.

CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA):

This action has been reviewed per the authority and criteria contained in the California Environmental Quality Act (CEQA), the State and local CEQA Guidelines, and the City's environmental regulations. The City, acting as the Lead Agency, determined that the ordinance is not subject to CEQA pursuant to Sections 15060(c)(2), 15060(c)(3), and 15061(b)(3) of the State CEQA Guidelines, because it will not result in a direct or reasonably foreseeable indirect physical change to the environment as there is no possibility that the action would result in a significant environmental impact, and because it does not constitute a "project" as defined in Section 15378 of the State CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3.

ATTACHMENTS:

1. City Financial Statements FY 2023-24

ATTACHMENT #1
City of Indian Wells, California
Annual Comprehensive Financial Report
Year Ended June 30, 2024

CITY OF INDIAN WELLS, CALIFORNIA
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2024
Prepared by the Finance Department
Kevin McCarthy, Finance Director
Erika Flores, Assistant Finance Director
Amy Dallosta, Accountant
Daisy Amezcua, Accounting Technician II
Joanna Rojas, Accounting Technician I
Camille Montemayor, Accounting Technician I
44-950 Eldorado Drive, Indian Wells, California 92210-7497 Telephone: 760-346-2489 — Fax: 760-346-0407
www.cityofindianwells.org

City of Indian Wells, California
Table of Contents
June 30, 2024

INTRODUCTORY SECTION
Letter of Transmittal i
Certificate of Achievement for Excellence in Financial Reporting (GFOA) xii Organizational Chart xiii
List of Principal Officers xiv

FINANCIAL SECTION
Independent Auditor's Report 1
Management's Discussion and Analysis 5
Basic Financial Statements
Government -Wide Financial Statements
Statement of Net Position 26
Statement of Activities 27
Fund Financial Statements
Balance Sheet - Governmental Funds 28
Reconciliation of the Statement of Net Position - Governmental Funds 29 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 30 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities - Governmental Funds 31
Statement of Net Position - Proprietary Funds 32
Statement of Revenues, Expenses, and Changes in Fund Position - Proprietary Funds 33 Statement of Cash Flows - Proprietary Funds 34
Statement of Fiduciary Net Position - Fiduciary Funds 36 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 37 Notes to Financial Statements 38
Required Supplementary Information
Schedule of the City's Proportionate Share of the Net Pension Liability - Miscellaneous Plan 85 Schedule of Plan Contributions — Miscellaneous Plan 86
Schedule of Changes in the Net OPEB Liability and Related Ratios 87 Schedule of OPEB Contributions 88
Budgetary Comparison Schedules
General Fund 89
Housing Authority Special Revenue Fund 90
Emergency Services Upgrade Special Revenue Fund 91
Notes to Required Supplementary Informaiton 92
Combining and Individual Fund Statements and Schedules
Combining Balance Sheet — Nonmajor Governmental Funds 98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 101

City of Indian Wells, California
Table of Contents
June 30, 2024
Budgetary Comparison Schedules - Special Revenue Funds
IWFA Debt Service Fund 104
Traffic Safety 105
Public Safety 1/2% Tax 106
Measure "A" Transportation 107
Fire Access Maintenance District No. 1 108
South Coast AQMD Vehicle Registration 109
Citizens Option for Public Safety Program 110
Gas Tax 111
AB 939 Recycling 112
Solid Waste 113
Consolidating LLMD 114
Street Lighting District 2001-1 115
Affordable Housing Opeartions 116
Budgetary Comparison Schedules - Capital Projects Funds Capital Improvements 117
City Streets Capital Reserve 118
Highway 111 Circulation Improvements 119
Park Facilities Fees 120
Transporation Facilities Fees 121
Recreation Facilities Fees 122
City Wide Public Improvements 123
Art in Public Places 124
Bridges Capital Reserve 125
Buildings Capital Reserve 126
Medians & Parkways Capital Reserve 127
Storm Drains Capital Reserve 128
Traffic Signals Capital Reserve 129
Technology Capital Reserve 130
City Vehicles Capital Reserve 131
Disaster Recovery Reserve 132
Park Facilities in Lieu 133
Internal Service Funds
Combining Statement of Net Position — Internal Service Funds 135 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds 136 Combining Statement of Cash Flows — Internal Service Funds 137 Statistical Section
Net Position by Component 140
Changes in Net Position 141
Fund Balances of Governmental Funds 142
Changes in Fund Balances of Governmental Funds 143
Tax Revenues by Source - Governmental Funds 144

City of Indian Wells, California
Table of Contents
June 30, 2024
Assessed Value and Estimated Actual Value of Taxable Property 145 Assessed Value of Property by Use Code, Citywide 146
Direct and Overlapping Property Tax Rates 147
Principal Property Tax Payers 148
Principal Sales Tax Producers 149
Property Tax Levies and Collections 150
Transient Occupancy Tax Collections 151
Ratios of Outstanding Debt by Type 152
Ratios of General Bonded Debt Outstanding and Legal Debt Margin 153 Direct and Overlapping Debt 154
Pledged -Revenue Coverage 155
Demographic and Economic Statistics 156
Principal Employers 157
Full -Time Equivalent City Government Employees by Function 158 Operating Indicators by Function 159
Capital Assets Statistics by Function 160

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INDIAN WELLS

CALIFORNIA
December 12, 2024
Honorable Mayor, Members of the City Council, and
Residents of the City of Indian Wells, California:

The City of Indian Wells presents the Annual Financial
Report for the fiscal year ending June 30, 2024. This report reflects the City's ongoing commitment to meeting the
community's evolving needs through prudent financial
stewardship and consistent, constructive communication
with residents.

Indian Wells maintains its position as one of California's most affluent and financially secure municipalities, with oversight by the City's Finance Committee supporting
strong fiscal practices. This financial strength is attributed to the City Council's conservative fiscal management and collaboration with the management team. The local economy, largely driven by a robust tourism sector —supported by luxury resorts, a renowned tennis facility, and a premier golf resort— continues to sustain Indian Wells' financial health. In 2023/24, tourism revenues exceeded projections, resulting in record collections in transient occupancy and admissions taxes.

While fiscal strength is evident, Indian Wells acknowledges the need for cautious planning given potential economic uncertainties, including the impacts of the pandemic, inflationary pressures, and macroeconomic factors. The City has adopted a conservative approach to budgeting for the coming year, balancing optimism with fiscal prudence.

The City prioritizes essential services, particularly in public safety, and reserves an annual amount exceeding $2 million for capital replacements. Retirement obligations are fully funded, supporting the City's commitment to long-term fiscal sustainability.

This letter provides a summary of the City's financial status and economic outlook. For a more comprehensive analysis, the Management's Discussion and Analysis (MD&A) follows the independent auditor's report and should be read alongside this transmittal letter. The Financial Statements, prepared in accordance with GAAP, are designed to present a fair and accurate financial picture as of June 30, 2024, with internal controls in place to ensure reliability. These controls are balanced to provide reasonable assurance without excessive cost.

Under Government Code 26909(a), the City engaged a certified public accountant to perform an annual audit, meeting statutory requirements to file an audit report with the State Controller and County Auditor within 12 months of fiscal year-end. For the fiscal year ending June 30, 2024, Farr Davis, CPA, issued an unmodified opinion on the City's Financial Statements, included in this report. In addition to the annual audit, Farr Davis conducts agreed -upon procedures reviews at the Golf Resort, Housing Authority communities, Tennis Stadium, and with hotel partners, reinforcing oversight of key City operations. i

Profile of the City of Indian Wells
Incorporated in 1967, the City of Indian
Wells is located in California's Coachella
Valley, approximately 120 miles east of
Los Angeles in Riverside County. Known
for its natural beauty, exclusive residential
country clubs, luxury resorts, championship
golf courses, and extensive cultural and
recreational offerings, Indian Wells is home
to 4,797 permanent residents within its

15.04 square miles, with an additional
4,000 to 5,000 seasonal residents during
winter months.

Indian Wells operates under a City Council -City Manager governance structure. The City Council, composed of a Mayor and four members elected to four-year terms, is responsible for policy and legislative decisions and appoints the City Manager and City Attorney. The City Manager, as chief executive, oversees policy execution and city operations.

The City provides comprehensive services, including law enforcement, fire protection, infrastructure management, economic and community development, code enforcement, arts and culture, and recreational activities. Fiscal planning is guided by a biennial budget and a five-year Capital Improvement Program, both developed in line with generally accepted accounting principles. Adopted by July 1, the biennial budget follows a program -based approach that aligns expenditures with City objectives for improved reporting and resource allocation.

Outstanding Community Benefits
The City of Indian Wells epitomizes an exceptional quality of life, enriched by a diverse array of cultural and social offerings, a progressive and unified municipal administration, luxurious hotels, and the esteemed Indian Wells Golf Resort, renowned for its championship golf facilities.

The City hosts numerous significant sporting and cultural events.

These include the BNP Paribas Open, the largest two-week event in the world, featuring the Association of Tennis Professionals (ATP) World Tour and the Women's Tennis Association (WTA) at the prestigious Indian Wells Tennis Garden. Additionally, Indian Wells welcomes the Coachella Valley Firebirds, a professional ice hockey expansion team, Ironman 70.3, Desert Town Ha11, Winterfest, and the Indian Wells Arts Festival. The cultural vibrancy of the area is further enhanced by the Living Desert Zoo, located in Indian Wells and neighboring Palm Desert.
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Indian Wells is proud to maintain one of the lowest crime rates and fastest public safety response times in the Coachella Valley, thanks to the diligent efforts of its law enforcement and fire/paramedic services.

The Joslyn Center offers a wide range of activities to cater to diverse interests and energy levels.

Moreover, Indian Wells features a thriving resident benefit program. The Indian Wells Resident Benefit Card provides residents with exclusive discounts at the Indian Wells Golf Resort, Indian Wells Tennis Garden, Acrisure Arena, and all four distinguished Indian Wells hotels. The City also hosts art exhibitions and lectures and offers complimentary access to events such as the BNP Paribas Open and Desert Town Hall. Additionally, residents enjoy social gatherings, patriotic community celebrations, and a variety of engaging activities.

Financial Communication
Financial communication with residents and other
stakeholders is a fundamental Council Goal and top
priority. Throughout the year, the Council utilizes the following methods to keep residents fiscally informed:

1. Council meetings and study sessions to
encourage public engagement.

2. Presentation of the financial Forecast during the
Council's annual Strategic Planning sessions to
encourage public engagement.

3. Finance Committee Meetings.

4. Presentation of the annual financial statements.

5. The City's website.

6. The Mayor's letter.

7. Fiscal update eblasts.

8. The Financial Primer mailer was sent to all
residents.

9. The Capital Improvements overview mailer was
sent to all residents.

10. Indian Wells Check Book on the City's website.

11. The Budget at a Glance mailer was sent to all
residents.

12. Resident meetings with the City's Finance Director.

13. Coffee with the City Manager.

Factors Affecting Financial Condition
National Economic Trends
In last year's report, we cautiously anticipated a potential recession, noting that while economic indicators suggested its likelihood, the full impact remained uncertain. Although the recession did not materialize, it's crucial to recall that many national economists forecasted an imminent downturn, particularly after two consecutive quarters of negative GDP growth (Q1 and Q2 of 2022), traditionally signaling a recession.

The current U.S. economic outlook remains uncertain. Since late 2022, growth has persisted, though real GDP decline may occur in Q4 2023 or early 2024. Forecasters are increasingly hopeful for a "soft landing," wherein inflation eases without triggering a recession. Despite this optimism, we maintain a recessionary outlook, supported by indicators such as low housing starts, declining consumer confidence, a shorter average manufacturing workweek, and an inverted yield curve.

While inflation has dropped significantly, it remains 3.2% higher than last year. Federal Reserve actions have increased the Federal Funds Rate to a 22 -year high, slowing inflation from over 9% to around 4%, yet still above the 2% target. The Fed's decision to hold rates steady in September suggests hesitation to raise them further, though substantial rate cuts seem unlikely unless a severe recession occurs, which is not broadly expected in 2024.

The Coachella Valley, heavily reliant on tourism, continues to face pandemic -related headwinds.

International tourism, especially from Asia, remains below pre -pandemic levels due to extended visa processing times and high airfares. However, regional tourism from California has helped offset these challenges, with the Valley benefiting as local residents opted for nearby vacations.

California Economic Overview
California's economy faces challenges with unemployment rising from 3.8% to 4.6% since August 2022, surpassing the national rate. The state's labor force and employment levels show a decline, despite a rebound in the leisure and hospitality sectors. Retail, wholesale, and government jobs remain below pre - pandemic levels, though California ranks fourth in GDP per capita, surpassing Texas and Florida in growth since 2019.

Hotel demand in California has almost returned to pre -pandemic levels, reaching 95% by August 2023.

Occupancy and ADR are also gradually rising, with a full recovery anticipated in 2024. This sector's resurgence, particularly in leisure and hospitality, signals robust demand but with tempered ADR growth compared to the post -pandemic surge in 2022.

In the Inland Empire, logistics has been a growth driver, but sector expansion faces increasing environmental and health scrutiny. This shift may provide opportunities for economic diversification in the Coachella Valley. The logistics boom that aided economic recovery plateaued in late 2021, with job losses raising questions about whether this signals a cyclical slowdown or structural adjustments through automation.

The Ports of Los Angeles and Long Beach report a 10% decline in imports, which may suggest a shift in consumer spending or logistical concerns, potentially impacting regional employment in logistics.

Coachella Valley Hotel Sector
Coachella Valley hotels are projected to see a 2.5% increase in RevPAR in 2023, driven by a 2.1% rise in occupancy and a modest 0.4% increase in ADR. However, growth lags behind the national RevPAR increase of 3.8%. Upper -priced hotels are expected to lead with a 3.3% RevPAR increase, while lower - priced segments may see a 1.4% decline due to ADR pressures. Forecasts for 2024 anticipate minimal RevPAR growth at 0.3%, with occupancy expected to stabilize between 65.4% and 65.8% over the next five years.
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Strategic Goals and Priorities
City of Indian Wells Financial Strategy Overview
Strategic financial planning in the City of Indian Wells is fundamental to optimizing cash flow and aligning resources with the City's long-term objectives. The Financial Strategy ensures continuous alignment with the community's evolving priorities, presenting a clear picture of the City's financial status and strategy for achieving its strategic goals.

Budget and Strategic Alignment
The City's biennial budget is not merely a fmancial plan but a clear statement of priorities. It provides a roadmap for the coming years, capturing the City Council's goals while balancing fiscal constraints. This budget reflects the collaborative input of the City Council, staff, and community, prioritizing high -quality service delivery, operational efficiency, and robust infrastructure investment.

Below is a summary of the City Council's Goals for the upcoming budget cycle:

Fiscal Policies
• Maintain Capital Reserves: Continue the Council policy of reserving $2.0 million annually for long-term capital replacements.
• Fully Fund Pension Program: Uphold the Council policy of maintaining a fully funded pension program.
• Implement Public Safety and Community Facilities: Establish the districts. • Expand Pension Program: Develop a plan to expand the pension program to pre -fund future pension obligations.
• Diversify Revenue Streams: Explore new revenue measures to diversify income sources and secure dedicated funding for future needs, such as public safety cost increases. • Utilize One -Time Loan Funds: Provide direction on the optimal use of one-time loan funds paid to the City by the former RDA.

Capital Improvement Program Update
• Advance Five -Year CIP: Advance five-year Capital Improvement Program (CIP) for the upcoming budget cycle.
• Invest in Street Maintenance: Continue investing in the street maintenance program to achieve an average Pavement Condition Index of 80 points or higher. • Enhance landscaping: Maintain and expand vibrant, water -conscious citywide landscaping. • Annual Sidewalk Repairs: Perform annual sidewalk repairs to eliminate tripping hazards.

Provide Responsive, Innovative, and Efficient Public Safety • Prioritize Public Safety: Emphasize public safety through real-time responsiveness, "Coffee with a Cop" events, quarterly Public Safety Committee meetings, City Council updates, and the annual State of the City event.
• Maintain Low Crime Rates: Ensure a safe, low -crime environment through contracts with the Riverside County Sheriffs and Fire Departments.

Tourism Update and Opportunities
• Support Resort Partners: Collaborate with Visit Greater Palm Springs to support resort partners and influence Transient Occupancy Tax (TOT) growth.
• Develop Marketing Strategies: Create demand for Indian Wells through brand awareness and strategic marketing targeting both group and leisure markets.

Evaluating Energy Efficiency Opportunities
• Implement Energy Efficiency Upgrades: Continue the energy efficiency program, which includes solar installations, efficient heating and cooling systems, lighting upgrades, electric car chargers, backup generators, and a battery backup system at City Hall and the Golf Resort.

General Plan Update
• Complete the General Plan Update: Adhere to state law requiring regular updates to the General Plan, serving as the long-range policy document for land use and resource management. • Reflect Community Goals: Update the General Plan to comply with new state housing laws, establish new development goals, and expand economic opportunities.

Key focus areas include:
• Directing growth in the northeast section for mixed -use development. • Incentivizing affordable housing and identifying mixed -use and ADU opportunities. • Establishing form -based development standards to prevent overburdening public services. • Improving transportation and bikeway opportunities.
• Planning for 5G wireless infrastructure.
• Updating the Highway 111 Specific Plan for consistent standards. • Enhancing wayfinding and branding for key locations.

Community Events and Activities
• Promote Community Engagement: The Indian Wells Community Activities Committee advises on and oversees a comprehensive calendar of community activities, including Sister City relations and the Resident Benefits program.

Develop Landscape Uniformity Along Highway 111
• Maintain Consistent Landscaping: Develop uniform standards for landscaping materials and maintenance along Highway 111, coordinating efforts with HOAs for consistent upkeep.

Encourage and Expand Economic Development Opportunities • Focus on Economic Development: The Economic Development Division, established in 2020, monitors development, evaluates Enhanced Infrastructure Financing Districts (EIFDs), and fosters business relationships to shape the city's future. vi

Update Communications Plan
• Enhance Resident Communication: Revitalize the City's Communication Policy to expand and enrich communication programs, engaging residents through email, newsletters, social media, mailings, the city website, and cable channels.

Expand Partnership with the Indian Wells Preservation Foundation • Support Historical Education: Strengthen the relationship with the Indian Wells Historic Preservation Foundation (IWHPF) to educate the community on local history and support IWHPF's community involvement efforts.

Review of City Administrative Processes and Municipal Code Update • Regular Review and Updates: Continuously review and update administrative processes and the Municipal Code to ensure adherence to best practices.

Housing Authority Goals
• Manage Affordable Housing: Oversee age -restricted affordable housing properties and develop new sites in partnership with Abode Communities, ensuring future projects align with community needs and housing opportunities.

This structured summary ensures clarity and ease of understanding, emphasizing key priorities and initiatives of the City of Indian Wells.

City of Indian Wells Key Achievements
City Finances
• Budget Surplus: FY 2024-25 Mid -Cycle budget update shows a $3.2 million surplus. The FY 2023-24 surplus increased from $1 million to $1.9 million, with a net General Fund growth of over $9 million.
• Cash Flow Projections: General Fund cash reserves are projected to reach $20.7 million by June 2024 and $26.4 million by June 2025.
• Pension Funding: Fully funded pension with a new pre -funding program for future obligations. • Operational CFD Implementation: Establishment of Community Facilities District (CFD) to support future public safety funding.
• Resident Communications: Enhanced outreach through:
• Financial Primer: Annual direct mailer on financial performance. • Budget at a Glance: Summary of Council goals, savings initiatives, General Fund, public safety, and capital investments.
• Capital Projects Overview: Capital investment summary, including a map of project areas. • Capital Improvement Program (CIP): Accelerated $33 million CIP projects, completing several within two years. Allocated $2 million for future projects. • Grant Funding: Secured over $13 million since 2019 and anticipates an additional $5 million in federal earmarks.
• Developer Fees Update: Revised developer fees to align with current needs. vii

Housing
• Collaborated with Abode to address maintenance issues at Indian Wells and Mountain View Villas.
• Continued efforts to acquire the Lissoy Opportunity parcel.

Economic Development
• Supported Sprouts' Grand Opening.
• Launched an electronic plan check and permit system for efficient submittals. • Progressed Genton development plans.

Housing Element
• Successfully completed the Housing Element update.

Tourism
• Appointed a new Director of Tourism.
• Strengthened partnerships with Golf Resort and hotels. • Hosted 2nd Winterfest and secured the Epson Tour for October 2024.

Public Safety
• Introduced a public safety initiative targeting speeding and noise enforcement. • Implemented license plate readers citywide.

Fairway Park
• Celebrated the April ribbon cutting, under budget and positively impacting the community.

City Council Policy Update
• Completed an update to the City Council Policy Manual.

Indian Wells Golf Resort
• Revised Troon Management Agreement to include performance incentives. • Achieved profitability post -capital adjustments, removing resident subsidies. • Initiated redesign of the Players Course and approved a new restaurant concept with $1.25 million investment from Troon.

Additional Projects
• Advanced Sister City partnership with Kelowna, Canada. • Expanded event funding and improved resident communications through various channels. • Received Tree City USA and Growth Award for excellence in urban forestry. • Finalized the local hazard mitigation plan and Landscape Ordinance. • Hosted the first HOA Community Workshop.
viii

• Completed citywide CIP projects, including Hwy 111 pavement, community repaving, and a pedestrian path at IWGR traffic circle.
• Supported the Council Ad -Hoc Committee on commissions and expanded resident benefits like pickleball and community events.

Identification of Appropriated Governmental Funds
In accordance with applicable financial reporting standards, the governmental funds subject to biannual appropriation by the City Council are as follows:
• General Fund: This fund serves as the city's principal operating fund, supporting essential services such as public safety, public works, and administrative operations. • Special Revenue Funds: These funds account for resources dedicated to specific purposes, such as public safety funds, state gas tax funds, and landscape and lighting maintenance district funds. • Debt Service Funds: These funds are used to repay principal and interest on general obligation bonds and other long-term debt.
• Capital Projects Funds: These funds support the construction, acquisition, or improvement of significant capital assets, including infrastructure projects such as roads and facilities. • Housing Funds: These funds provide financial resources to support affordable housing initiatives, including housing development, rehabilitation programs, and rental assistance. • Enterprise Fund: This fund operates as a self-sustaining entity funded primarily through user fees and charges. It is accounted for separately to ensure the financial integrity of operations. • Internal Service Fund: This fund accounts for services provided internally to other city depai tments.

The City Council appropriates these funds biannually during the formal budget process to ensure fiscal accountability and compliance with legal and policy guidelines. Midcycle updates are also performed to provide additional transparency and accountability. The appropriation of governmental funds reflects our ongoing commitment to transparency, accountability, and excellence in financial management.

Document Structure
In addition to the fund -by -fund financial information presented in the City's financial statements, the Government -wide Financial Statements are presented. The Government -wide Financial Statements include a Statement of Net Position providing the City's total net position, including infrastructure, and a Statement of Activities displaying the cost of delivering government services.

These statements are further analyzed in the Management's Discussion and Analysis (MD&A) narrative section. The MD&A provides "financial highlights" and interprets the financial reports by analyzing trends and explaining changes, fluctuations, and variances in the economic data. In addition, the MD&A is intended to disclose any known noteworthy events or decisions affecting the City's financial condition.

The Annual Financial Report includes the financial activity for all funds of the City. The City provides various services, including planning, building, public works, engineering, maintenance, and general ix

administrative activities. Contracted services include police and fire protection and landscape maintenance.

The following governmental agencies provide services to the City of Indian Wells citizens. They are excluded from this report because the City does not have financial accountability over these agencies: the State of California and its depai iuents, the County of Riverside and its depai liiients, Cove Communities Services Commission, Coachella Valley Association of Governments, Riverside County Transportation Commission, Riverside County Waste Management District, Desert Sands Unified School District, County Superintendent of Schools, Coachella Valley Unified School District, Desert Community College District, Coachella Valley Mosquito, and Vector Control District, Coachella Valley Water District, Sunline Transit Agency, Greater Palm Springs Convention and Visitors Bureau, and the Desert Resorts Regional Airport Authority.

Established Financial Controls
The internal controls framework is designed to provide reasonable but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the valuation of costs and benefits requires estimates and judgments by management.

Independent Audit
An annual independent audit of the City's Financial Statements was conducted. The accounting firm of Farr Davis was appointed by the City Council and reported to the Finance Committee to perform the annual audit. The auditors' report on the basic financial statements, as well as the combining and individual fund statements and schedules, is included in the financial section of this report.

Annual Internal Control Review
The City is responsible for ensuring an adequate internal control structure. Accordingly, the internal control structure is subject to constant evaluation by the management of the City and annual review by independent auditors. Assessments determine the internal control structure's adequacy and whether the City complied with applicable laws and regulations. The results of the City's annual audit for the fiscal year that ended June 30, 2024, provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws and regulations.

Accounting Controls
In the public sector, a city government maintains a variety of "funds," which provide the basis for separately recording the financial data related to a specific activity. A fund is an accounting entity with complete self -balancing accounting records. Each fund is established due to some restriction on the use of the resources received by the fund. For example, in the private sector, a corporation may have many subsidiaries that comprise the parent corporation. Likewise, in the public sector, all the funds make up the complete financial resources of the City. This report includes the transactions of all entities over which the City Council has authority (as defined by the Governmental Accounting Standards Board).

The City's accounting system operates on a modified accrual basis of accounting for all governmental and agency -type funds. Under the modified accrual basis of accounting, revenues are recorded when received in cash or accrued when they are both measurable and collectible within the accounting period or soon enough after the end of the period to pay liabilities of the period. Expenditures other than interest or long- term debt are recorded when liabilities are incurred. At year-end, the City prepared the required entries x

necessary to report the City's financial position and activities on an accrual basis of accounting, which recognizes revenues when earned and expenses when incurred.

In addition to maintaining funds to record accounting transactions, internal controls exist within the accounting system to ensure the safety of assets from misappropriation, unauthorized use, or disposition and to maintain the accuracy of financial record keeping. These internal controls must be established consistent with sound management practices based upon the cost/benefit of the controls imposed. The control cost should not be high for its derived use as viewed by City management. The internal controls at the City of Indian Wells are sufficient to ensure, in all material respects, the safety of the City's assets and the accuracy of the financial record -keeping system.

Certificate of Award for Outstanding Financial Reporting The City received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for fiscal year 2023. This award recognizes adherence to the highest standards in governmental financial reporting. The report for fiscal year ending June 30, 2024, upholds these standards and is presented with full transparency and accuracy.

Acknowledgments
This report reflects the dedication of the Finance Department and all City staff, alongside the support of Farr Davis and the oversight provided by the City Council and Finance Committee. Their collective efforts ensure the ongoing integrity and transparency of the City's financial operations.

Respectfully submitted,
Cos -e)
Chris Freeland
City Manager
xi

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Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Indian Wells
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2023
Executive Director/CEO
xii

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LIST OF PRINCIPAL OFFICIALS
JUNE 30, 2024
Council — Manager Form of Government
Ty Peabody
Council Member
City Council
Greg Sanders
Mayor
Bruce Whitman
Mayor Pro Tem
Dana Reed
Council Member
City Administration
Christopher J. Freeland
City Manager
Kevin McCarthy, Finance Director
Peter Castro, Deputy City Manager
Ken Seumalo, Public Works Director
Jon Berg, Community Development Director
Donna Griffith
Council Member
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DavisFarr

CERTIFIED PUBLIC ACCOUNTANTS
Davis Farr LLP
18201 Von Korman Avenue I Suite 1100 I Irvine, CA 92612 Main: 949.474.2020 I Fax: 949.263.5520
Independent Auditor's Report
The Honorable Mayor and Members of City Council
City of Indian Wells, California
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Indian Wells (the"City"), as of and for the year June 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the City of Indian Wells, as of June 30, 2024, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As described further in Notes 8 and 19 to the financial statements, during the year ended June 30, 2024, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences. As a result, the beginning net position has been restated. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements The City's management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for one year after the date that the financial statements are issued.

Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control -related matters that we identified during the audit. 2

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the Management's Discussion and Analysis, and Budgetary Comparison Schedules for the General Fund and each major special revenue fund, Schedule of Proportionate Share of the Net Pension Liability, Schedule of Plan Contributions, Schedule of Changes in the Net OPEB Liability and Related Ratios and Schedule of OPEB Contributions be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.

We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the Annual Comprehensive Financial Report. The other information comprises the Introductory Section and Statistical Section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.
3

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 12, 2024, on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance.

Irvine, California
December 12, 2024
4

Management's Discussion and Analysis
The management of the City of Indian Wells provides this overview and analysis of the City's financial activities for the fiscal year ended June 30, 2024. Management's Discussion and Analysis offers a summary of the City's financial results and position. This information should be reviewed alongside the letter of transmittal on page i and the basic financial statements on pages 26-27.

Financial Highlights
• At the fiscal year-end, the City's assets exceeded liabilities by $297,398,992, with $186,401,561 invested in capital assets, $84,752,032 in unrestricted funds for obligations, and $26,245,399 restricted by external mandates. The City's net position rose by $5,579,936, primarily due to economic growth.
• Governmental fund balances totaled $106,501,986, comprising $12,685,767 in non -spendable reserves, $27,614,322 in restricted funds, $801,602 for capital projects, $39,114,080 in assigned funds for capital projects, and $26,286,215 in unassigned balances. • The General Fund balance stood at $41,288,053, including $12,685,230 in non -spendable assets and $28,602,823 in unassigned funds.
• Net capital assets for Governmental Activities fell by $131,528 to $151,870,603 after accounting for $4,413,720 in acquisitions and construction in progress, deletions of $1,690,860, and depreciation of $2,854,388.
• As of June 30, 2024, the City reported a net pension asset of $1,111,562 for the Miscellaneous Plan. • As of June 30, 2024, the City of Indian Wells reported a net OPEB liability of $7,235,393, reflecting the unfunded retiree health benefit obligations after accounting for assets in the California Employers' Retiree Benefit Trust (CERBT). The City established Section 115 Trusts as a strategic mechanism to address these obligations to accumulate dedicated resources. The City's restricted OPEB assets totaled $4,199,030 in the PARS Trust and $5,869,903 in the Shuster Trust as of the same date. In accordance with GAAP, these assets are classified as restricted City assets and will only be reclassified as plan assets when transferred to the respective pension or OPEB plans. This structure underscores the City's commitment to sound financial management and the proactive reduction of long-term liabilities.
• The City's compensated absences liability was $1,067,620 as of June 30, 2024. • Indian Wells Golf Resort's operating revenues reached $22,434,245, with operating expenses of $22,085,747, including operations ($18,904,856), general and administrative costs ($654,296), and depreciation ($2,526,595). Nonoperating expenditures totaled $231,380, with investment income loss of $9,374, interest expense of $16,134, and a loss on asset disposition of $205,872.

Overview of the Financial Statements
The discussion and analysis here will introduce the City of Indian Wells' basic financial statements. The City of Indian Wells' basic financial statements consist of three components: (1) Government -Wide Financial Statements, (2) Fund Financial Statements, and (3) the Notes to Financial Statements. This report also includes supplementary information to furnish additional detail to support the basic financial statements. 5

Government -wide Financial Statements. The Government -Wide Financial Statements are designed to provide readers with a broad overview of the City of Indian Wells' finances like a private -sector business.

The statement of net position presents financial information on all of the City of Indian Wells' assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a valuable indicator of whether the City of Indian Wells' financial position is improving or deteriorating.

The statement of activities presents information showing how the City of Indian Wells' net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both Government -wide Financial Statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions intended to recover all or a sizable portion of their costs through user fees (business -type activities). The City's governmental activities include general government, public safety, highways and streets, sanitation, economic development, and culture and recreation. The Government -wide Financial Statements include the City (the primary government) and a legally separate maintenance district for which the City is financially accountable.

The City of Indian Wells Fire Access Maintenance District No. 1, although legally separate, functions as a department of the City and is therefore included as an integral part of the primary government. The Government -Wide Financial Statements are on pages 26-27 of this report.

Fund Financial Statements - A fund is a grouping of related accounts that control resources segregated for specific activities or objectives. The Fund Financial Statements provide information about the City's most significant funds (major funds) rather than the City as a whole. Some funds are required by State and Federal law or by bond covenants. Other funds are utilized to control and manage resources intended for particular purposes. The City of Indian Wells, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance -related legal requirements. All funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental funds - Governmental funds account for the same functions reported as governmental activities in the Government -wide Financial Statements. However, unlike Government -wide Financial Statements, governmental fund financial statements focus on near -term inflows and outflows of spendable resources and balances of spendable resources available at the end of the fiscal year. Such information may help evaluate a government's near -term financing requirements.

Because the focus of governmental funds is narrower than the Government -wide Financial Statements, it is helpful to compare the information presented for governmental funds with similar information presented for governmental activities in the Government -wide Financial Statements. By doing so, readers may better understand the long-term impact of the government's near -term financing decisions. The governmental fund balance sheet and the governmental fund statement of revenues, expenses, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.

Information is presented separately in the governmental fund balance sheet and the governmental fund statement of revenues, expenses, and changes in fund balances for the major funds of the government. The City of Indian Wells maintains individual governmental funds, distinguishing between major and non - major funds. Information is presented separately in the governmental fund balance sheet and the 6

governmental fund statement of revenues, expenditures, and changes in fund balances. Data collected from governmental funds are combined into a single aggregate presentation. Individual fund data for each of these non -major governmental funds is provided in the form of combining statements elsewhere in this report.

The City of Indian Wells chooses to report eighteen (18) Landscape and Lighting District funds as the Consolidated LLMD rather than separately reporting each of the funds. The City also combines five (5) Gas Tax funds as the Consolidated Gas Tax Fund for this reporting purpose.

The City adopts a biennial budget. The Biennial Operating Budget and the Capital Improvement Program are prepared and administered in accordance with established procedures set forth by the City Council. These procedures include guidelines, standards, and requirements for the preparation and monitoring of both the Operating and Capital Budgets. The budget is managed to ensure adequate funds are available to cover anticipated expenditures. Public input is considered throughout the process, with scheduled public meetings and study sessions at key City Council decision points. A budgetary comparison schedule is provided for the General Fund to demonstrate compliance with this budget.

Proprietary funds - Proprietary funds report the same functions as business -type activities in the Government -wide Financial Statements. Internal service funds accumulate and allocate costs internally among various functions. Proprietary funds provide the same information as the Government -wide Financial Statements, only in more detail.

Fiduciary funds - The City utilizes Fiduciary funds to account for assets held by the City in a trustee capacity or as an agent for other governmental entities, private organizations, or individuals. The City's fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in net fiduciary position. We exclude these activities from the City's Government -Wide Financial Statements because the City cannot use these assets to finance its operations.

Notes to the Financial Statements - The financial statements include the Notes to the Financial Statements, which provide essential narrative details about the information in the financial statements. Data in the Notes to the Financial Statements are critical to a reader's understanding of the Government -Wide and Fund Financial Statements.

Required Supplementary Information - Besides the required elements of the Basic Financial Statements, we included Required Supplementary Information, which provided budgetary information for the General Fund and major special revenue funds and required schedules for pension and other post - employment benefits.

Combining and individual fund statements and schedules - Provide combining fund information and budgetary schedules following the required supplementary information.

Government -Wide Overall Financial Analysis
This analysis focuses on the Statement of Net Position (Table 1) and the Statement of Net Activities (Table 2) of the City's activities. The changes in net position over time may serve as a valuable indicator of a government's financial position.
7

Analysis of the Statement of Net Position
The following table lists a condensed Statement of Net Position for the fiscal years ending June 30, 2024, and 2023.

Table 1
Statement of Net Position
Governmental activities
Business -Tvpe Activities Total
2024 2023 2024 2023 2024 2023
Current and restricted
assets S 127,525,367 5 113,877,738
Capital assets 151,870,603 152,011,131
Total As sets 279395,970 265,888,869
Deferred Outflows of
Resources 5,901239 7,294,736
Current Liabilities 5,810,115 5297,852
Non -current Liabilities 22?20,880 15,434,003
Total Liabilities 28,030,995 20,731,855
Deferred Inflows of
Resources 1,927,049 2453,685
Net Position:.

Net investment in
capital assets 142,190278 147924,061
Restricted
Community
development 945,799 725,787
Housing 12,034,055 15,429,469
Public safety 5,863,937 6,183,630
Public works 2,494,602 2345,243
Pension obligations 2,041,991 5,567,799
OPEB obligations 2833,540 1,798,141
Unrestricted 86,935,013 70,023,935
Total Net Position S 255339,215 $ 249,998,065
1,004,121 $ (1329,126) S 128,529,488 S 112,543,612
42,708176 44,928;050 194,578,879 196,939,151
43,712,397 43,598,924 323,108367 309,487,793
105,410 163,316 6,006,699 7,458,052
1,185,31 1,566,592 6,995346 6,864,444
535380 330,461 22,756160 15,764,464
1,720,611 1,897,053 29,7M,606 22,628,908
37,419 44,196 1,964.465 2,497,881
42,518369 44597,589 184,708,647 192,521,650
31,475
(490-067)
945,799 725,787
12,034,055 15,429,469
5,863,937 6,183,630
2,494,602 2345243
139371 2073,466 5,707,170
2,833,540 1,798,141
(2,915,969) 86,444946 67,107,966
42,059,777 $ 41,820,991 S 297398,992 $ 291,819,056
In the most recent fiscal year, current and restricted assets in governmental activities rose by $13,647,629, while capital assets declined by $140,528. Total liabilities in governmental activities increased by $7,299,140, mainly due to increased non -current liabilities.

At the fiscal year-end, the City's assets exceeded liabilities by $297,398,992. Of this, $184,708,647 is invested in capital assets, $86,444,946 is available as unrestricted net position for ongoing obligations, and $26,245,399 is restricted for specific uses mandated by external parties, including grantors, bondholders, and higher levels of government.
8

Analysis of the Statement of Activities
Table 2 below lists a condensed Statement of Activities for the fiscal years ending June 30, 2024, and 2023.

Table 2
Statement of Activities
Governmental Activities
2024 2023
Business -Type Activities Total
2024 2023
Revenues
Program Revenues:

Charges for services $ 4,782,673 $ 2,218,818 $ 22,331,661 $ 21,188,761 Operating contributions
and grants 16,225,266 11,256,801
Capital contributions and
grants 68,032 202,766
General Revenues:

Taxes
Property taxes 4,362,305 3,945,967
Transient occupancy
taxes 12,159,497 12,450,662
Sales taxes 1,824,421 1,766,438
Franchise taxes 1,398,516 1,231,605
Business licenses taxes 225,554 150,396
Admission taxes 5,067,845 3,939,996
Investment income (loss) 4,965,343 3,137,278 (9,374) (9,708) Other 296,204 481,138 - 26,000
2024 2023
27,114,334 $ 23,407,579
16225,266 11,256,801
68,032 202,766
4,362,305 3,945,967
12,159,497 12,450,662
1,824,421 1,766,438
1398,516 1,231,605
225,554 150,396
5,067,845 3,939,996
4,955,969 3,127,570
296,204 507,138
Total Revenues 51,375,656 40,781,865 22,322,287 21,205,053 73,697,943 61,986,918 Expenses:

General government 14,392,102 15,297,837 - - 14,392,102 15,297,837 Public safety 13,334,797 13,309,494 13,334,797 13,309,494 Community development 5,638,377 6,782,254 5,638,377 6,782,254 Public works 12,071,338 11,245,752 - 12,071338 11,245,752 Interest 329,643 457,880 - - 329,643 457,880
Golf resort - - 22,307,753 21,970,857 22307,753 21,970,857 Total Expenses 45,766,257 47,093,217 22,307,753 21,970,857 68,074,010 69,064,074 Increase (decrease) in net
position before transfers 5,609,399 (6,311352) 14,534 (765,804) 5,623,933 (7,077,156) Transfers (102,584) (44,606) 102,584 44,606
Increase (decrease) in net
position 5,506,815 (6,355,958) 117,118 (721,198) 5,623,933 (7,077,156) Net Position, Beginning of Year,
as Restated 249,832,400 256,354,023 41,942,659 42,542,189 291,775,059 298,896,212 Net Position, End of Year $ 255,339,215 $ 249,998,065 $ 42,059,777 $ 41,820,991 $ 297,398,992 $ 291,819,056 Revenues:

Governmental Activities: The City collected $51,375,656 in fiscal year 2023/24, up from $40,781,865 the previous year. This revenue increase was driven by property tax growth, a resurgence in tourism, the BNP Paribas tennis tournament, and higher investment earnings.

Business -Type Activities: The Golf Resort collected $22,322,287 in fiscal year 2023/24, compared to $21,205,053 the prior year. Increased revenue was due to tourism growth, expanded outdoor entertainment, higher demand for golf, increased golf rates, and more banquet and wedding events.

Expenses:

Governmental Activities: Total expenses were $45,766,257. Operational cost increases were primarily due to inflation.
9

Business -Type Activities: The Golf Resort incurred $22,307,753 in operating costs, which included $19,904,856 for operations, $654,296 for general and administrative expenses, $16,134 in interest expenses, a $205,872 loss on asset disposition, and $2,526,595 in depreciation.

Financial Analysis of Governmental Funds
Governmental funds. The focus of the City's governmental funds is to provide information on near -term inflows, outflows, and balances of spendable resources. Such information helps assess the City's financing requirements. As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $106,501,986 as follows:

Table 3
Fund Balances by Category
Fiscal Year Ending 6/30/2024
General Fund
All Other Funds Total Funds
Nonspendable:

Prepaid costs $ 63,162 $
Notes and loans 12,622,068
Restricted for:

Community
development
Public safety
Public works
Debt service
Committed for:

Capital projects
Assigned To:

Capital projects
537 $ 63,699
- 12,622,068
12,979,854
5,863,937
2,494,602
6,275,929
12,979,854
5,863,937
2,494,602
6,275,929
801,602 801,602
39,114,080 39,114,080
Unassigned: 28,602,823 (2,316,608) 26,286,215
Total Fund
Balances $ 41,288,053 $ 65,213,933 $ 106,501,986
At year-end, government fund balances totaled $106,501,986, including $12,685,767 in non -spendable reserves, $27,614,322 in restricted funds, $801,602 committed to capital projects, and $39,114,080 assigned for long-term capital projects and replacements per Governing Board limitations. The unassigned fund balance is $26,286,215.
10

Business -type activities The City intends to charge fees to customers to cover all or most of the cost of certain services it provides. The Indian Wells Golf Resort activities are reported in this category.

Table 4
Business -Type Activities
Fiscal Year Ending 6/30/2024
Operating Revenues:

Charges for services
Total Revenues
Operating Expenses:

Operations
General and Administration
Depreciation
Golf Resort
Operations
Total
$ 22,434,245 $ 22,434,245
22,434,245 22,434,245
18,904,856 18,904,856
654,296 654,296
2,526,595 2,526,595
Total Expenditures 22,085,747 22,085,747
Operating Income (loss) 348,498 348,498
Non -operating Revenues (Expenses)
Investment Income (loss) (9,374) (9,374)
Interest expense (16,134) (16,134)
Loss on disposition of capital assets (205,872) (205,872) Total nonoperating revenues (expenses) (231,380) (231,380) Changes in Net Position
Net Position, Beginning of the Year
117,118 117,118
41,942,659 41,942,659
Net Position at End of Year $ 42,059,777 $ 42,059,777
The Indian Wells Golf Resort collected $22,434,245 in operating revenues from golf fees, food and beverage sales, and event sales. Operating expenses totaled $22,085,747, comprising $18,904,856 in operations, $654,296 in general and administrative expenses, and $2,526,595 in depreciation. Nonoperating expenses totaled $231,380, including an investment income loss of $9,374, interest expense of $16,134, and a $205,872 loss on asset disposition.

Analysis of Individual Funds
The General Fund
The General Fund is the City's primary operating fund. At the end of the most recent fiscal year, the fund balance in the City's General Fund was $41,288,053. The fund balance breaks down as follows: non - spendable assets comprise $12,685,230 in notes and loans, and $28,602,823 is unassigned. 11

Comparing unassigned and total fund balances to total general fund expenditures may be helpful in measuring the general fund's liquidity. For example, the unassigned fund balance represents 141.2% of total general fund expenditures, while the total fund balance represents 203.9%.

Table 5
General Fund Financial Summary
Revenues:

Taxes
Licenses and permits
Intergovernmental
Charges for services
Interest income (loss)
Fines and forfeitures
Other income
Total Revenues
Expenditures:

General government
Public safety
Community development
Public works
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ Change % Change
$ 24,526,087 $ 23,099,286 $ 1,426,801 6.2%
683,169 925,135 (241,966) -26.2%
942,282 933,561 8,721 0.9%
666,372 558,846 107,526 19.2%
1,404,591 101,144 1,303,447 1288.7%
64,546 107,012 (42,466) -39.7%
31,117 158,635 (127,518) -80.4%
28,318,164 25,883,619 2,434,545 9.4%
10,405,052 10,257,611
4,854,763 5,096,149
2,078,322 2,051,675
2,914,979 2,985,140
20,253,116 20,390,575
8,065,048 5,493,044
147,441 1.4% a
(241,386) -4.7%
26,647 1.3%
(70,161) -2.4%
(137,459) -0.7%
2,572,004 46.8%
Other Financing Sources (Uses)
Transfer in 18,500 (18,500) 100.0%
Transfer out (3,425,053) (4,127,789) 702,736 100.0%
Total Transfers (3,425,053) (4,109,289) 684,236 100.0%
Net Change in Fund Balance $ 4,639,995 $ 1,383,755 $ 3,256,240 -235.3% Tourism remains the primary source of the City's revenue, with tourism and Golf Resort revenues exceeding projections for the fiscal year. Transient occupancy tax and admissions tax revenue reached record levels, resulting in a 9.4% increase in General Fund revenues for fiscal year 2023/24 compared to the prior year, driven primarily by tourism growth. General Fund expenditures decreased by $137,459 (0.7%) due to effective public safety service cost management. Refer to the Fund Financial Statements, pages 28-37. 12

The Housing Authority Fund
The Indian Wells Housing Authority was established to support the retention, rehabilitation, and development of affordable housing for households within HUD income limits. The Housing Authority Fund manages expenditures for affordable housing operations and provides annual reports to the State Department of Housing and Community Development on community housing projects. At the close of the fiscal year, the Housing Authority Fund balance was $12,034,055.

Table 6
Housing Authority Financial Summary
Revenues:

Intergovernmental
Interest income
Total Revenues
Expenditures:

General government
Community development
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ 113,172 $
434,381
154,080
547,553 154,080
3,404,143
250,000
1,847,021
250,000
3,654,143 2,097,021
$ Change % Change
$ 113,172 0.0%
280,301 181.9%
393,473 181.9%
1,557,122 84.3%

0.0%
1,557,122 74.3%
(3,106,590) (1,942,941) (1,163,649) 59.9%
Other Financing Sources (Uses)
Transfer in 517,445 4,442,555 (3,925,110) -88.4%
Transfer out (806,269) (87,019) (719,250) 826.5%
Total Transfers (288,824) 4,355,536 (4,644,360) -106.6% Net Change in Fund Balance $ (3,395,414) $ 2,412,595 $ (5,808,009) -240.7% Revenues for fiscal year 2023/24 included $113,172 in intergovernmental fees and $434,3 81 in interest income. Expenditures totaled $3,654,143, covering staff salaries and benefits, professional services (such as audits and legal counsel), liability insurance premiums, contributions to homelessness nonprofits, and capital maintenance projects. This represented a $1,557,122 increase over the prior year, primarily due to higher capital repair and maintenance costs. Refer to the Fund Financial Statements, pages 28-37. 13

The Emergency Services Upgrade Fund
The Emergency Services Upgrade Fund manages contracts for fire suppression, prevention, investigation, safety education, emergency management, and paramedic services, which the Riverside County Fire Department provides under a CALFIRE subcontract. The fund balance at the fiscal year-end was $4,729,212.

Table 7
Emergency Services Upgrade Financial Summary
Revenues:

Taxes
Charges for services
Interest income (loss)
Assessments
Other income
Total Revenues
Expenditures:

Public safety
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ Change % Change
$ 4,206,481 $ 4,680,767 $ (474,286) -10.1%
737,398 604,356 133,042 22.0%
207,355 (1,691) 209,046 -12362.3%
610,241 611,631 (1,390) -0.2%
21,171 10,677 10,494 98.3%
5,782,646 5,905,740 (123,094) -2.1%
5,350,057 6,160,835
29,297 18,397
5,379,354 6,179,232
403,292 (273,492)
(810,778) -13.2%
10,900 59.2%
(799,878) -12.9%
676,784 -247.5%
Other Financing Sources (Uses)
Transfer out (146,616) (145,031) (1,585) 0.0%
Total Transfers (146,616) (145,031) (1,585) 0.0%
Net Change in Fund Balance $ 256,676 $ (418,523) $ 675,199 -161.3% Revenues for fiscal year 2023/24 included a $4,206,481 fire tax credit collected by Riverside County on behalf of the City, $737,398 from ambulance billing, and $610,241 from a citywide assessment. Interest income was $207,355.

Expenditures totaled $5,379,354, covering staff salaries and benefits, professional services, fire contract costs, liability insurance premiums, maintenance projects, and capital outlay. This amount represents a $799,878 decrease from the prior year, primarily due to efficient fire services contract management. Refer to the Fund Financial Statements, pages 28-37.

The Indian Wells Financing Authority
In February 2023, the Indian Wells Financing Authority issued lease revenue bonds of $13,930,000 to provide funds to finance public improvements and energy efficiency improvements in the City. The bonds dated February 10, 2023, and issued at a premium of $1,338,171 are payable semiannually on April 1 and October 1 of each year, commencing October 1, 2023, and mature in 2042. 14

The bonds are payable from base rental payments to be made by the City for the right to use certain real property and improvements of the City pursuant to a Lease Agreement dated February 1, 2023. At the end of the most recent fiscal year, the fund balance in the Indian Wells Financing Authority Fund was $6,275,929.

Table 8
Indian Wells Financing Authority Financial Summary
Revenues:

Investment income
Total Revenues
Expenditures:

Principal retirement
Interest and fiscal charges
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ Change % Change
$ 356,346 $ 379,938 $ (23,592) -6.2%
356,346 379,938
470,000 380,000
466,445 586,874
936,445 966,874
(580,099) (586,936)
(23,592) -6.2%
90,000 23.7%
(120,429) -20.5%
(30,429) -3.1%
6,837 -1.2%
Other Financing Sources (Uses)
Transfer in 977,739 966,875 10,864 1.1%
Transfer out (4,843,037) (1,752,399) (3,090,638) 176.4% Total Transfers (3,865,298) (785,524) (3,079,774) 392.1% Net Change in Fund Balance $ (4,445,397) $ (1,372,460) $ (3,072,937) 223.9% Revenues collected during the fiscal year 2023/24 include $356,346 in interest income. Total debt service totaled $936,445, including $470,000 in principal retirements and $466,445 in interest and fiscal charges. 15

The Capital Improvements Fund
The Capital Improvement Program is the City's multi -year plan for developing capital facilities and improvements, outlining expected projects over the next five years. Capital projects involve construction, acquisition, expansion, rehabilitation, or non -routine maintenance costing $5,000 or more, resulting in a capital asset. The program identifies required capital maintenance, facilities, improvements, significant equipment purchases, and capital -related studies or master plans. At the end of the fiscal year, the Capital Improvements Fund balance was $11,923,603.

Table 9
Capital Improvements Financial Summary
Revenues:

Intergovernmental
Investment income
Other income
Total Revenues
Expenditures:

General government
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ Change % Change
$ 3,911,420 $ 184,414 $ 3,727,006 2021.0%
566,598 3,484 563,114 16162.9%
1,096 - 1,096 100.0%
4,479,114 187,898 4,291,216 2283.8%
91,847 134,511 (42,664)
6,411,443 5,147,043 1,264,400
-31.7%

24.6%
6,503,290 5,281,554 1,221,736 23.1%
(2,024,176) (5,093,656) 3,069,480 -60.3%
Other Financing Sources (Uses)
Transfer in 6,093,037 3,772,129 2,320,908 61.5%
Total Transfers 6,093,037 3,772,129 2,320,908 61.5%
Net Change in Fund Balance $ 4,068,861 $ (1,321,527) $ 5,390,388 -407.9% Revenues collected during the fiscal year 2023/24 include $3,911,420 in intergovernmental revenues, $566,598 in interest income, and $1,096 in other income. Expenditures totaling $6,503,290 during the fiscal year 2023/24 include $91,847 in general government costs and $6,411,443 in new capital investments within the Community. See the Fund Financial Statements tab, pages 28-37.
16

City Streets Capital Reserve
The City Streets Capital Reserve Fund is part of the City's replacement plan, designated to fund capital improvement projects. The capital asset replacement plan outlines annual contributions to support the long- term capital replacement program.

Table 10
City Streets Capital Reserve Financial Summary
Revenues:

Investment income
Total Revenues
Expenditures:

Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
2024 2023
$ Change % Change
$ 662,416 $ 55,779 $ 606,637 1087.6%
662,416 55,779
2,500,000
2,500,000
662,416 (24'1,221)
606,637 1087.6%
(2,500,000) 0.0%
(2,500,000) 0.0%
3,106,637 -127.1%
Other Financing Sources (Uses)
Transfer in 162,500 814,000 (651,500) 100.0%
Total Transfers 162,500 814,000 (651,500) 100.0%
Net Change in Fund Balance $ 824,916 $ (1,630,221) $ 2,455,137 -150.6% The City's Capital Contribution Policy allocates funds to the Capital Reserve program for future infrastructure projects, including streets, bridges, and City facilities. Reserves support municipal asset management by allowing funds to be allocated for asset lifecycle management. The City Council determines reserve appropriations. The City Streets Capital Reserve is funded through interest income and transfers.

When capital funding is required, the City Council authorizes transfers from replacement funds to the capital improvement fund, either during the annual budget cycle or for specific projects. Prior to approval, the City provides fmancial information on replacement funds, including beginning balances, projected revenues, and anticipated ending balances. See the Fund Financial Statements tab, pages 28-37. 17

Park Facilities In Lieu
Park -in -lieu fees are used for the construction of recreation and open spaces charged under the Quimby Act to new residential development occurring in a subdivision at a standard of 3.0 acres per 1,000 residents.

Under this framework, developers are required to pay a fee, often calculated based on the extent of their development project, in lieu of providing on -site park or recreational facilities. The collected fees are utilized to fund the acquisition, development, and maintenance of parks and open spaces within the jurisdiction, thereby ensuring that the community's recreational needs are met.

Table 11
Park Facilities In Lieu Financial Summary
2024 2023 $ Change % Change
Revenues:

Intergovernmental
Developer fees
Total Revenues
Expenditures:

General government
Capital Outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Net Change in Fund Balance
$ 3,328 $ - $ 3,328 0.0%
40,341 111,021 (70,680) -63.7%
43,669 111,021 (67,352) -60.7%
7,605 2,822 4,783 169.5%
78,571 - 78,571 0.0%
86,176 2,822 83,354 2953.7%
(42,507) 108,199 (150,706) -139.3%
$ (42,507) $ 108,199 $ (150,706) -139.3%
General Fund Budgetary Highlights
Actual General Fund revenues exceeded budget projections by $2,434,545, primarily due to:
• Higher property tax revenue
• Growth in the tourism sector
• Increased interest income
The final budget for General Fund expenditures was $137,459 below the original budget, resulting from:
• Cost management in public safety services
• Reduced spending on Public Works
18

Government Activities
Table 12 presents the cost of the City's five most extensive programs: general government, community development, public safety, public works, and golf resort —and each program's net cost (total cost less revenues generated by the activities).

The net cost of services indicates that the overall cost of government is greater than the revenues generated to support it from fees and user charges. This suggests that the taxes and general revenues charged by the City are necessary to support its operations.

Table 12
Net Cost of Governmental Activities
Total Cost of Services Net Cost of Services
2024 2023
2024 2023
Government Activities
General government $ 14,392,102 $ 15,297,837 $ (9,814,604) $ (14,444,907) Public safety 13,334,797 13,309,494 (5,251,697) (5,934,663) Community development 5,638,377 6,782,254 (1,556,021) (5,277,241) Public works 12,071,338 11,245,752 (7,738,321) (7,300,141) Interest 329,643 457,880 (329,643) (457,880)
Total Governmental Activities
Business -Type Activities
Golf resort
Total Business -Type Activates
45,766,257 47,093,217 (24,690,286) (33,414,832)
22,307,753 21,970,857 23,908 (782,096)
22,307,753 21,970,857 23,908 (782,096)
Total Primary Government $ 68,074,010 $ 69,064,074 $ (24,666,378) $ (34,196,928) See the Statement of Activities on page 27 for further details. 19

Capital Assets
The Statement of Net Position includes such infrastructure assets as City -maintained buildings, bridges, streets, storm drains, equipment, traffic signals, and vehicles. Infrastructure assets, except land, are depreciated to reflect a net infrastructure amount.

Government Activities
Table 13
Summary of Changes in Capital Assets
Gove rmne ntal Activitie s
Balance at Balance at
July 1, 2023 Additions Deletions Transfers June 30, 2024 Capital assets, not being
depreciated:

Land $ 33,289,388 $ - S - $ - $ 33,289,388
Construction in progress 6,612,312 1,311,432 (339,376) 7,584,368 Total capital assets not
being depreciated 39,901,700 1,311,432 - (339,376) 40,873,756 Capital assets, being depreciated:

Intangible 2,500,000 - 2,500,000
Buildings and improvements 67,286,071 - (1,001,557) (601,433) 65,683,081 Equipment 2,033,803 296,757 (689,303) - 1,641,257
Infrastructure 115,991,782 2,805,531 940,809 119,738,122 Total capital assets
being depreciated 187,811,656 3,102,288 (1,690,860) 339,376 189,562,460 Less accumulated depreciation for:

Intangible (250,000) (250,000) - (500,000)
Buildings and improvements (32,705,925) (1,621,120) 42,714 43,142 (34,241,189) Equipment (1,647,137) (160,723) 682,870 (1,124,990)
Infrastructure (41,108,163) (2,116,057) 567,928 (43,142) (42,699,434) Total accumulated
depreciation (75,711,225) (4,147,900) 1,293,512 (78,565,613) Total capital assets
being depreciated, net 112,100,431 (1,045,612) (397,348) 339,376 110,996,847 Total capital assets, net $ 152,002,131 $ 265,820 $ (397,348) $ $ 151,870,603 Governmental Activities capital assets, net of depreciation, decreased by $131,528, from $152,002,131 to $151,870,603. During the fiscal year, the City acquired $4,413,720 in new capital assets, with additional construction still underway. Asset deletions totaled $1,690,860, and net depreciation expense amounted to $2,854,388. For detailed information, refer to Note 7, Capital Assets, in the Notes to Basic Financial Statements on pages 58-59.
20

Business -Type Activities
Table 14
Summary of Changes in Capital Assets
Business -Type Activities
Balance at Balance at
July 1, 2023 Additions Deletions Transfers June 30, 2024 Capital assets, not being
depreciated:

Land $ 13,910,956 $ - $ $ - $ 13,910,956
Construction in progress - - -
Total capital assets not
being depreciated 13,910,956 - - 13,910,956
Capital assets, being depreciated:

Buildings and improvements 85,713,772 - (492,536) (223,173) 84,998,063 Equipment 4,496,222 512,746 (44,553) 223,173 5,187,588
Infrastructure 433,390 - 433,390
Right to use asset 555,109 - - 555,109
Total capital assets
being depreciated 91,198,493 512,746 (537,089) - 91,174,150 Less accumulated depreciation for:

Buildings and improvements (56,556,844) (1,841,376) 286,665 (58,111,555) Equipment (3,261,641) (539,327) 44,499 (3,756,469)
Infrastructure (122,793) (7,223) (130,016)
Right to use asset (240,121) (138,669) (378,790)
Total accumulated
depreciation (60,181,399) (2,526,595) 331,164 - (62,376,830) Total capital assets
being depreciated, net 31,017,094 (2,013,849) (205,925) 28,797,320 Total capital assets, net $ 44,928,050 $ (2,013,849) $ (205,925) $ $ 42,708,276 Capital assets from Business -type Activities net of depreciation decreased by $2,219,774 from 44,928,050 to $42,708,276. The Indian Wells Golf Resort acquired $512,746 in new capital assets during the fiscal year.

Deletions totaled $537,089, and the depreciation expense (net) reached $2,526,595. Details of the City's capital assets can be found in Note 7 Capital Assets on pages 58-59 of the Notes to Basic Financial Statements.
21

Long-term Liabilities
At year-end, the City's governmental activities had $21,667,146 in long-term liabilities.

Table 15
Summary of Changes in Long-Te rm Liabilities
De
Co
202
Pre
Le
Ne
Ne
Tot
;cription
ase
t
t
2024
2023
$ Change
% Change
mpensated absences
$ 1,067,620
$ 936,030
$ 131,590

14.1%
2 Lease Revenue Bonds
13,080,000
13,550,000
(470,000)
-3.5%
mium
1,183,340
1,249,696
(66,356)
-5.3%
Payable
189,907
330,461
(140,554)
-42.5%
Pension Liability (asset)
(1,089,114)
(700,736)
(388,378)

55.4%
OPEB Liability (asset)
7,235,393
(745,061)
7,980,454
-1071.1%
al Long Term Debt
$ 21,667,146
$ 14,620,390
$ 7,046,756

48.2%
As of June 30, 2024, the City of Indian Wells reported a compensated absences liability totaling $1,067,620.

Additionally, the Indian Wells Financing Authority recorded $13,080,000 in outstanding lease revenue bonds, accompanied by a bond premium of $1,183,340. These bonds are earmarked to support public infrastructure and energy efficiency improvements.

Net Pension Asset
The City recognized a net pension asset of $1,111,562 as its proportional share of the Miscellaneous Plan's net pension liability as of June 30, 2024. This allocation is based on the City's projected long-term contributions relative to the total contributions of participating employers, as determined through actuarial analysis.

Net OPEB Liability
The City of Indian Wells participates in the Public Employees Medical and Hospital Care Act (PEMHCA), administered by Ca1PERS, to provide health insurance coverage for its employees and eligible retirees.

Under the City's PEMHCA contract, retiree health obligations are pre -funded through an Other Post - Employment Benefits (OPEB) account held within the California Employers' Retiree Benefit Trust (CERBT). The CERBT is a Section 115 governmental trust, also managed by Ca1PERS, designed to assist public employers in funding future retiree health liabilities.

As of June 30, 2024, the City reported a net OPEB liability of $7,235,393. This liability reflects the remaining unfunded obligation for retiree health benefits after considering the assets accumulated in the CERBT trust. The City's proactive approach in pre -funding its OPEB obligations demonstrates its commitment to maintaining financial stability and fulfilling its long-term obligations to employees and retirees.

OPEB Section 115 Trusts
To address its pension and OPEB obligations, the City of Indian Wells has established Section 115 Trusts as a strategic mechanism to accumulate assets dedicated to reducing these liabilities. In June 2018, the City 22

Council approved the creation of a Section 115 Trust with U.S. Bank National Association and Public Agency Retirement Services (PARS) as the Trust Administrator. As of June 30, 2024, the PARS Trust held $984,352 in pension assets, with $105,056 earned in interest income and $5,336 in plan costs for the fiscal year. Additionally, the Trust reported $4,199,030 in OPEB assets, with $500,907 in interest income, $16,588 in plan costs, and $3,500,000 in contributions during the same period.

In December 2023, the City Council approved a second Section 115 Trust in partnership with Shuster Advisory Group and Charles Schwab as the Trust Administrator, focusing exclusively on OPEB obligations.

As of June 30, 2024, this trust held $5,869,903 in OPEB assets. Contributions to both trusts are irrevocable, the assets are safeguarded from creditors, and the funds are dedicated to providing benefits for plan members.

In accordance with generally accepted accounting principles (GAAP), the assets held in these Section 115 Trusts are classified as restricted City assets rather than pension or OPEB plan assets. They will only be reclassified as plan assets when transferred directly to the pension or OPEB plans. This structured approach underscores the City's commitment to responsibly managing its pension and OPEB obligations while ensuring compliance with regulatory standards and financial best practices.

The restricted Section 115 trust assets are as follows at June 30, 2024:
• PARS — Pension $ 984,352
• PARS — OPEB 4,199,030
• Shuster — OPEB 5,869,903
• Total restricted assets $11,053,285
For details, see Note 8 (Long -Term Liabilities), Note 9 (Defined Benefit Pension Plan), Note 12 (Other Post Employment Benefit Plan), and Note 13 (PARS and Shuster Advisory Group Section 115 Trusts) in the Notes to Basic Financial Statements.

Economic Factors and Next Year's Budgets and Rates
Last year, our report expressed cautious optimism about the potential impact of a recession on Indian Wells, stating that while a recession appeared likely, its impact remained uncertain. What Happened? Despite the absence of the anticipated recession, it is essential to remember that most national forecasters were predicting an imminent economic downturn at that time. Our concerns were based on negative economic growth in consecutive quarters (Q1 and Q2 of 2022), constituting a recession when referring to two negative quarters of real Gross Domestic Product (GDP) growth.

Currently, the trajectory of the U.S. economy remains unclear. Since the conclusion of the second quarter of 2022, national growth rates have been evident, with any decline in real GDP likely to occur later, towards the final quarter of 2023 and early in the subsequent year. The question remains whether a recession will materialize by the end of this year or early 2024 or if the Federal Reserve Bank of the U.S. can orchestrate a soft landing characterized by reduced inflation without inducing a recession. A growing number of forecasters appear to lean towards the possibility of a soft landing.

We maintain our recession forecast based on various indicators signaling the concluding 12 months of an economic expansion, including relatively low housing starts, diminished consumer confidence, a declining average workweek in manufacturing, and an inverted yield curve. Despite a significant reduction in inflation over the past few months, it remains up 3.2% o compared with the same period a year ago, according to the latest Department of Labor data. Ahead of the December meeting, Fed officials are trying to determine whether they have tightened monetary policy enough or need to raise rates further to curb inflation. The U.S. 23

central bank has proactively addressed inflation concerns by consistently and rapidly raising the Federal Funds Rate, reaching a 22 -year high with 11 increases since Q1 of 2022. Although the inflation rate has reduced from over 9% to around 4%, the target inflation rate of 2% remains unattained. The Federal Reserve opted to maintain interest rates at the current level in its latest meeting in September, signaling a reluctance to raise them further. It is unlikely that the central bank will substantially lower interest rates in 2024 unless a severe recession materializes, which is not currently predicted.

U.S. international tourism has yet to recover fully, with only two-thirds of pre-COV D-19 levels reported by the Los Angeles Tourism and Convention Board. Prolonged foreign visa application processes and elevated airline ticket prices from China hinder the recovery of international tourism. However, Canadian travel restrictions are comparatively less significant, which provides some relief to the Coachella Valley.

Despite setbacks such as the cancellation/postponement of the Coachella Art and Music Festival for two consecutive years, the impact of the Coronavirus was somewhat mitigated by increased regional tourism.

Southern California residents, unable or unwilling to travel abroad, redirected their preferences, choosing the Coachella Valley as a local destination. This shift contributed to a more favorable recovery scenario for the Coachella Valley post-COVID-19.

Request for Information
This financial report is designed to provide a general overview of the City of Indian Wells' finances for those interested in the government's finances. Questions concerning any information provided in this report or requests for additional financial information should be addressed to Kevin McCarthy, City Finance Director, 44-950 Eldorado Drive, Indian Wells, California 92210.
24

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25

City of Indian Wells, California
Statement of Net Position
June 30, 2024
Assets
Cash and investments
Restricted cash and investments
Receivables
Accounts
Accrued interest
Prepaid costs
Deposits
Inventories
Internal balances
Notes receivable
Due from Successor Agency
Net pension asset
Capital assets not being depreciated
Capital assets, net of depreciation
Governmental Business -Type
Activities Activities
Total
$ 79,669,717 $ 653,208 $ 80,322,925
17,562,943 - 17,562,943
3,330,444 316,954 3,647,398
382,540 433 382,973
63,699 46,117 109,816
12,140,000 - 12,140,000
546,576 546,576
590,642 (590,642) -
1,127,743 - 1,127,743
11,600,000 - 11,600,000
1,057,639 31,475 1,089,114
40,873,756 13,910,956 54,784,712
110,996,847 28,797,320 139,794,167
Total assets 279,395,970
Deferred Outflows of Resources
Deferred amounts related to pensions
Deferred amounts related to OPEB
3,569,160
2,332,129 - 2,332,129
43,712,397 323,108,367
105,410 3,674,570
Total deferred outflows of resources 5,901,289
Liabilities
Current liabilities
Accounts payable
Accrued liabilities
Deposits payable
Interest payable
Noncurrent liabilities
Due within one year
Compensated absences
Long-term debt
Due in more than one year
Compensated absences
Net OPEB liability
Long-term debt
4,518,601
285,054
888,572
117,888
168,566
729,922
553,581
7,235,393
13,533,418
Total liabilities 28,030,995
Deferred Inflows of Resources
Deferred amounts related to pensions
Deferred amounts related to OPEB
1,241,737
105,410 6,006,699
848,607 5,367,208
1,147 286,201
335,477 1,224,049
117,888
86,368 254,934
81,732 811,654
259,105 812,686
7,235,393
108,175 13,641,593
1,720,611 29,751,606
37,419 1,279,156
685,312 - 685,312
Total deferred inflows of resources 1,927,049
Net Position
Net investment in capital assets
Restricted for
Community development projects
Housing
Public safety
Public works
Pension
OPEB
Unrestricted
142,190,278
945,799
12,034,055
5,863,937
2,494,602
2,041,991
2,833,540
86,935,013
37,419 1,964,468
42,518,369 184, 708, 647
31,475
(490,067)
945,799
12,034,055
5,863,937
2,494,602
2,073,466
2,833,540
86,444,946
Total Net Position $ 255,339,215 $ 42,059,777 $ 297,398,992 See Notes to Financial Statements
26

City of Indian Wells, California
Statement of Activities
June 30, 2024
Functions/Programs
Government Activities
General government
Public safety
Community development
Public works
Interest
Total governmental activities
Business -type Activities
Golf resort operations
Total business -type activities
Total Primary Government
$
Expenses
14,392,102
13,334,797
5,638,377
12,071,338
329,643
45,766,257
22,307,753
Program Revenues
Charges for
Services
$ 64,546
737,398
3,958,920
21,809
4,782,673
22,331,661
22,307,753 22,331,661
$
Operating
Contributions
and Grants
$ 4,512,952
7,345,702
123,436
4,243,176
16,225,266
Capital
Contributions
and Grants
$
68,032
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business -type
Activities Activities
$ (9,814,604) $
(5,251,697)
(1,556,021)
(7,738,321)
(329,643)
Total
$ (9,814,604)
(5,251,697)
(1,556,021)
(7,738,321)
(329,643)
68,032 (24,690,286) - (24,690,286)
68,074,010 $ 27,114,334 $ 16,225,266 $ 68,032
General Revenues
Taxes
Property taxes, levied for general purpose
Transient occupancy taxes
Sales taxes
Franchise taxes
Business licenses taxes
Admission taxes
Investment income (loss)
Other
Total general revenues
Transfers
Change in Net Position
Net Position, Beginning of Year, as Restated
Net Position, End of Year
(24,690,286)
4,362,305
12,159,497
1,824,421
1,398,516
225,554
5,067,845
4,965,343
296,204
30,299,685
(102,584)
5,506,815
249,832,400
23,908 23,908
23,908 23,908
23,908 (24,666,378)
(9,374)
4,362,305
12,159,497
1,824,421
1,398,516
225,554
5,067,845
4,955,969
296,204
(9,374) 30,290,311
102,584
117,118 5,623,933
41,942,659 291,775,059
$ 255,339,215 $ 42,059,777 $ 297,398,992
See Notes to Financial Statements
27

City of Indian Wells, California
Balance Sheet - Governmental Funds
June 30, 2024
Special Revenue Funds Capital Projects
Assets
Cash and investments
Restricted cash and investments
Receivables
Accounts
Accrued interest
Prepaid costs
Deposits
Due from other funds
Notes receivable
Due from Successor Agency
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable
Accrued liabilities
Deposits payable
Due to other funds
Total liabilities
Deferred Inflows of Resources
Unavailable revenue
Fund Balances
Nonspendable
Prepaid costs
Notes and loans
Restricted for
Community development
Public safety
Public works
Debt service
Committed to
Capital projects
Assigned
Capital projects
Unassigned
Total fund balances
Total Liabilities and Fund Balances
General
Emergency City Streets Nonmajor Total
Housing Services Capital Capital Park Facilities Governmental Governmental Authority Upgrade Improvements Reserve In Lieu Funds Funds $ 25,726,650 $ 301,155 $ 5,238,205 $ 13,286,728 $ 17,993,117 5 1,976,836 1,091,304 16,001 -
42,097 133,938 20,298 50,133 69,723
63,162 - - - -
- 12,140,000 - -
2,904,250 506,804 -
1,022,068 - 105,675 -
11,600,000 - - -
$ 14,994,611 $ 77,540,466
6,509,658 6,509,658
246,303 3,330,444
58,101 374,290
537 63,699
12,140,000
3,411,054
1,127,743
11,600,000
$ 43,335,063 $ 12,575,093 $ 6,349,807 $ 13,965,341 $ 18,062,840 $ - $ 21,809,210 $ 116,097,354 $ 1,302,241 $ 519,271 $ 638,712 $ 1488,803
259,167 14,639 7,953
401,208 7,128 - 349,131
503,804
1,962,616 541,038 646,665 2,041,738
84,394 973,930
63,162
12,622,068
12,034,055
4,729,212
11, 923, 603 18, 062, 840
28,602,823
41,288,053 12,034,055 4,729,212 11,923,603 18,062,840
$ 43,250,669 $ 12,575,093 $ 5,375,877 $ 13,965,341 $ 18,062,840 $ 869,574 $ 4,518,601
3,295 285,054
131,105 888,572
1,386,737 929,871 2,820,412
1,386,737
1,933,845 8,512,639
24,405 1,082,729
537 63,699
12,622,068
945,799 12,979,854
1,134,725 5,863,937
2,494,602 2,494,602
6,275,929 6,275,929
801,602 801,602
9,127,637 39,114,080
(1,386,737) (929,871) 26,286,215
(1,386,737) 19,850,960 106,501,986
$ 21,784,805 $ 115,014,625
See Notes to Financial Statements
28

City of Indian Wells, California
Reconciliation of the Statement of Net Position - Governmental Funds June 30, 2024
Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances - total governmental funds
Capital assets net of related accumulated depreciation have not been included as financial resources in governmental fund activity.

Unavailable revenue not collected within the availability period is included in revenue in the government wide financial statements.

Compensated absences are not considered due and payable and therefore have not been included in the governmental funds.

Long-term debt is not considered due and payable and therefore has not been included in the governmental funds.

Interest payable is not considered due and payable and therefore has not been included in the governmental funds.

Deferred outflows related to pensions
Deferred inflows related to pensions
Proportionate share of net pension asset is not a financial resource and, therefore, has not been included in governmental fund activity.

Internal service funds are used by management to charge the costs of certain activities, such as employee benefits, to individual funds. The assets and liabilities of the internal service funds are included in governmental activities of the statement of net position.
$ 106,501,986
151,870,603
1,082,729
(722,147)
(14,263,340)
(117,888)
3,569,160
(1,241,737)
1,057,639
7,602,210
Net Position of Governmental Activities $ 255,339,215
See Notes to Financial Statements
29

City of Indian Wells, California
Statement of Revenue, Expenditures and Changes in Fund Balances - Governmental Funds Year Ended June 30, 2024
Revenues
Taxes
Licenses and permits
Intergovernmental
Charges for services
Investment income (loss)
Fines and forfeitures
Rental income
Assessments
Developer fees
Other income
Total revenues
Expenditures
Current
General government
Public safety
Community development
Public works
Capital outlay
Debt service:

Principal retirement
Interest and fiscal charges
Total expenditures
Excess (Deficiency) of Revenues
over (under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
General
Special Revenue Funds
Rousing
Authority
$ 24,526,087 $
683,169
942,282
666,372
1,404,591
64,546
31,117
28,318,164
10,405,052
4,854,763
2,078,322
2,914,979
113,172
434,381
547,553
3,404,143
250,000
Emergency
Services
Upgrade
$ 4,206,481
737,398
207,355
610,241
21,171
5,782,646
5,350,057
29,297
Capital Projects
Capital
Improvements
3,911,420
566,598
1,096
4,479,114
91,847
6,411,443
City Streets
Capital Park Facilities
Reserve In Lieu
$ $
662,416
662,416
3,328
40,341
43,669
Nonmajor
Governmental
Funds
$ 427,657
831,588
966,721
21,809
2,609,379
4,392,502
483,608
2,820
9,736,084
Total
Governmental
Funds
$ 29,160,225
683,169
5,801,790
1,403,770
4,242,062
86,355
2,609,379
5,002,743
523,949
56,204
49,569,646
7,605 223,403 14,132,050
1,756,189 11,961,009
3,144,912 5,473,234
3,641,245 6,556,224
78,571 77Q248 7,289,559
470,000 470,000
466,445 466,445
20,253,116 3,654,143 5,379,354 6,503,290 - 86,176 10,472,442 46,348,521 8,065,048
(3,425,053)
(3,425,053)
4,639,995
36,648,058
$ 41,288,053
(3,106,590)
517,445
(806,269)
(288,824)
(3,395,414)
15,429,469
$ 12,034,055
403,292
(146,616)
(2,024,176)
662,416
(42,507)
(736,358) 3,221,125
6,093,037 162,500 31,083 3,088,262 9,892,327
(5,616,973) (9,994,911)
(146,616) 6,093,037 162,500 31,083
256,676 4,068,861 824,916 (11,424)
4,472,536 7,854,742 17,237,924 (1,375,313)
$ 4,729,212 $ 11,923,603 $ 18,062,840 $ (1,386,737) $
(2,528,711) (102,584)
(3,265,069) 3,118,541
23,116,029 103,383,445
19,850,960 $ 106,501,986
See Notes to Financial Statements
30

City of Indian Wells, California
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities - Governmental Funds
Year Ended June 30, 2024
Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds $ 3,118,541 Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlays exceed depreciation in the current period.

Capital outlay
Depreciation
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.

Governmental funds report pension contributions as expenditures.

However, in the statement of activities, pension expense is measured as the change in net pension liability and the amortization of deferred outflows and inflows related to pensions. This amount represents the net change in pension related amounts.

Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.

Principal repayments
Amortization of premium
2,722,860
(2,854,388)
(131,528)
77,825
(1,298,105)
470,000
66,356
Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period. 70,446
Revenues previously reported as unavailable revenue in the governmental funds are recognized as revenues in the current year, and recognized as revenues in the statement of activities in the prior year Internal service funds are used by management to charge the costs of certain activities, such as employee benefits, to individual funds.

The net revenues (expenses) of the internal service fund is reported with governmental activities.
1,082,729
2,050,551
Change in net position of governmental activities $ 5,506,815 See Notes to Financial Statements
31

City of Indian Wells, California
Statement of Net Position - Proprietary Funds
June 30, 2024
Business -Type Governmental
Activities Activities
Current Assets
Cash and investments
Restricted cash and investments - OPEB
Restricted cash and investments - pension
Receivables
Accounts
Accrued interest
Due from other funds
Prepaid costs
Inventories
Total current assets
Noncurrent Assets
Net pension asset
Capital assets, not being depreciated
Capital assets, net of depreciation
Total noncurrent assets
Total assets
Deferred Outflows of Resources
Deferred amounts related to pension
Deferred amounts related to OPEB
Total deferred outflows of resources
Liabilities
Current Liabilities
Accounts payable
Accrued liabilities
Deposits payable
Due to other funds
Compensated absences
Leases payable
Total current liabilities
Noncurrent Liabilities
Compensated absences, net of current
Lease payable, net of current
Net OPEB liability
Total noncurrent liabilities
Total liabilities
Deferred Inflows of Resources
Deferred amounts related to pension
Deferred amounts related to OPEB
Total deferred inflows of resources
Net Position
Net investment in capital assets
Restricted for Pension
Restricted for OPEB
Unrestricted
Total Net Position
Golf Resort
Operations
Internal Service
Funds
$ 653,208 $ 2,129,251
10,068,933
984,352
316,954
433
503,804
46,117
546,576
8,250
2,067, 092 13,190,786
31,475
13,910,956
28,797,320
42,739,751
44,806, 843 13,190,786
105,410
2,332,129
105,410 2,332,129
848,607
1,147
335,477
1,094,446
86,368
81,732
2,447,777
259,105
108,175
7,235,393
367,280 7,235,393
2,815,057 7,235,393
37,419
685,312
37,419 685,312
42,518,369
31,475
(490,067)
984,352
2,833,540
3,784,318
$ 42,059,777 $ 7,602,210
See Notes to Financial Statements
32

City of Indian Wells, California
Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds Year Ended June 30, 2024
Business -Type Governmental
Activities Activities
Operating Revenues
Charges for services
Interdepartmental charges
Total operating revenues
Operating Expenses
Operations
General and administration
Depreciation
Golf Resort
Operations
Internal Service
Funds
$ 22,434,245 $
1,224,686
22,434,245 1,224,686
18,904,856
654,296
2,526,595
Total operating expenses 22,085,747
Operating Income (Loss)
Nonoperating Revenues (Expenses)
Investment income (loss)
Interest expense
Loss on disposition of capital assets
Total nonoperating
revenues (expenses)
Income before transfers
Transfers In
Changes in Net Position
Net Position, Beginning of Year, as Restated
Net Position, End of Year
348,498 1,224,686
(9,374)
(16,134)
(205,872)
723,281
(231,380) 723,281
117,118 1,947,967
102,584
117,118 2,050,551
41,942,659 5,551,659
$ 42,059,777 $ 7,602,210
See Notes to Financial Statements
33

City of Indian Wells, California
Statement of Cash Flows - Proprietary Funds
Year Ended June 30, 2024
Business -Type Governmental
Activities Activities
Golf Resort Internal
Operations Service Funds
Operating Activities
Cash received from customers
Cash received from interfund service provided
Cash received from OPEB CERBT Trust
Cash payments to suppliers for goods and services
Cash payments to employees for services
Net Cash from (used for) Operating Activities
Non -Capital Financing Activities
Cash received from other funds
Cash paid to other funds
Net Cash from (used for) Noncapital Financing Activities Capital and Related Financing Activities
Purchase of capital assets
Repayment of leases payable
Net Cash from (used for) Capital and Related Financing Activities Investing Activities
Gain (loss) on investments
Net Change in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
$ 22,164,550 $
1,224,686
8,000,000
(18,829,182) (829,486)
(614,391) -
2,720,977 8,395,200
- 102,584
(3,799,178) -
(3,799,178) 102,584
(512,693)
(156,688)
(669,381)
(4,005) 720,134
(1,751,587) 9,217,918
2,404,795 3,964,618
$ 653,208 $ 13,182,536
See Notes to Financial Statements
34

City of Indian Wells, California
Statement of Cash Flows - Proprietary Funds
Year Ended June 30, 2024
Reconciliation of operating income (loss)
to net cash provided by (used for)
operating activities:

Operating income (loss)
Adjustments to reconcile operating
income (loss) to net cash from
(used for) operating activities
Depreciation
Changes in
Accounts receivable
Prepaid costs
Inventory
Net OPEB asset and related balances
Deferred outflows related to OPEB
Net pension asset and related balances
Accounts payable
Accrued liabilities
Compensated absences
Deposits payable
Net Cash from (used for) operating activities
Business -Type
Activities
Golf Resort
Operations
Governmental
Activities
Internal
Service Funds
$ 348,498 $ 1,224,686
2,526,595
(269,695)
19,729
(29,835)
39,905
303,131
(564,829)
345,473
2,005
7,980,454
(525,148)
(1,492)
$ 2,720,977 $ 8,395,200
Noncash financing, capital and investing activities for the year ended June 30, 2024:

Loss on disposal of capital assets $ (205,872) $
See Notes to Financial Statements
35

City of Indian Wells, California
Statement of Fiduciary Net Position - Fiduciary Funds
June 30, 2024
Private -Purpose
Trust Fund
Successor
Agency of the
Former RDA
Assets
Cash and investments
Restricted cash and investments
Receivables
Accrued interest
Prepaid costs
$ 8,088,306
590
32,777
91,690
Total assets 8,213,363
Deferred Outflows of Resources
Deferred loss on refunding 144,860
Liabilities
Interest payable
Due to City
Long-term liabilities
Due in one year
Due in more than one year
729,740
11,600,000
3,595,000
51,856,345
Total liabilities 67,781,085
Net Position (Deficit)
Held in trust for other purposes $ (59,422,862)
See Notes to Financial Statements
36

City of Indian Wells, California
Statement of Changes in Fiduciary Net Position - Fiduciary Funds Year Ended June 30, 2024
Private -Purpose
Trust Fund
Successor
Agency of the
Former RDA
Additions
Taxes
Investment income
$ 9,154,376
101,535
Total additions 9,255,911
Deductions
Administrative expenses
Interest and fiscal charges
Total deductions
Changes in Net Position
Net Position (Deficit), Beginning of the Year
Net Position (Deficit), End of the Year
240,000
1,636,244
1,876,244
7,379,667
(66,802,529)
$ (59,422,862)
See Notes to Financial Statements
37

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies
Reporting Entity
The City of Indian Wells (City) was incorporated during July 1967, under the General Laws of the State of California.

Indian Wells became a Charter City in 2003. The City operates under a Council -Manager form of government and provides the following services: public safety, highways and streets, sanitation, public improvements, planning and zoning, parks and recreation, and general administrative services.

Per GASB Statement No. 14, The Financial Reporting Entity and Statement No. 61, The Financial Reporting Entity:

Omnibus, the City (the primary government) has included within its reporting entity, for financial reporting purposes, all component units which meet the requirement described in these statements. GASB Statements No. 14 and No. 61 define financial accountability as follows: The primary government is accountable if the primary government appoints a voting majority of that organization and can impose its will or if there is a potential for the organization to provide specific financial burdens to or impose specific financial obligations on the primary government. A primary government may also be financially accountable for government organizations that are fiscally dependent on the primary government. For example, an organization is fiscally dependent if it cannot adopt its budget, levy taxes, set rates or charges, or issue bonded debt without approval from the City. In some instances, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City's financial statements to be misleading or incomplete.

All of the City's component units are considered to be blended component units. Although legally separate entities, blended component units are, in substance, part of the City's operations, so data from these units are reported with the primary government. A brief description of each component unit follows:

The City of Indian Wells Fire Access Maintenance District No. 1 (FAMD No. 1) was established in April 1973 to provide for the maintenance of access roads for fire and safety vehicles within the special district referred to as FAMD No. 1. Even though the FAMD No. 1 is a legally separate entity, it is reported as if it were part of the City because the City Council serves as the governing board. The primary government and the component unit have a financial benefit or burden relationship. Therefore, separate financial statements are not prepared for FAMD No.

1. The Housing Authority (Housing Authority) of the City of Indian Wells was established in February 2012 to assume the housing activities from the former Redevelopment Agency. The activity of the Housing Authority is reported in the Special Revenue Funds. Even though the Housing Authority is a legally separate entity, it is reported as if it were part of the City because the City Council, along with two appointed tenant commissioners, serves as the governing board of the Housing Authority. The primary government and the component unit also have a financial benefit or burden relationship. Therefore, separate financial statements are not prepared for the Housing Authority.
38

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Measurement Focus and Basis of Accounting
The basic financial statements of the City are composed of the following:
• Government -wide financial statements
• Fund financial statements
• Notes to the basic financial statements
Government -wide Financial Statements
Government -wide financial statements display information about the reporting government as a whole. These statements include separate columns for the governmental and business -type activities of the primary government (including its blended component units). All fiduciary activities are reported only in the fund financial statements.

Eliminations have been made in the statement of activities so that certain allocated expenses are recorded only once (by the function to which they were allocated). However, general government expenses have not been allocated as indirect expenses to the City's various functions.

Government -wide financial statements are presented using the economic resources measurement focus and the accrual basis of accounting. Under the economic resources measurement focus, all (both current and long-term) economic resources and obligations of the reporting government are reported in the government -wide financial statements. The basis of accounting refers to when revenues and expenses are recognized in the accounts and reported in the financial statements. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, liabilities, and deferred outflows/inflows of resources resulting from the exchange and exchange -like transactions are recognized when the exchange occurs.

Program revenues include charges for services, special assessments, and payments made by parties outside the reporting government's citizenry if that money is restricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Internally dedicated resources, taxes, and other items not adequately included in program revenues are reported as general revenues.

Amounts paid to acquire capital assets are capitalized as assets in the government -wide financial statements rather than reported as expenditures. Long-term debt proceeds are recorded as a liability in the government -wide financial statements rather than as another financing source. Amounts paid to reduce the long-term indebtedness of the reporting government are reported as a reduction of the related liability rather than as expenditure. 39

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Fund Financial Statements:

The underlying accounting system of the City is organized and operated based on separate funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self -balancing accounts that comprise its assets, deferred outflows (inflows), liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and how spending activities are controlled.

Fund financial statements for the primary government's governmental funds are presented after the government - wide financial statements. These statements display information about major funds individually and other governmental funds in the aggregate for governmental funds.

Governmental Funds
In the fund financial statements, governmental funds are presented using the modified -accrual basis of accounting. Their revenues are recognized when they become measurable and available. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be available to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days.

Revenue recognition is subject to the measurable and availability criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized as revenues in the period they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place. Imposed non - exchange transactions are recognized as revenues in the period they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government -mandated and voluntary non -exchange transactions are recognized as revenues when all applicable eligibility requirements have been met. Revenues, expenditures, gains, losses, assets, liabilities, and deferred inflows of resources resulting from non -exchange transactions are recognized in accordance with GASB Statement No. 33.

The fund financial statements present governmental funds using the current financial resources measurement focus. This means that only current assets and current liabilities are generally included on their balance sheets.

The reported fund balance (net current resources) is considered to be a measure of "available spendable resources." Governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current resources. Accordingly, they are said to present a summary of sources and uses of "available spendable resources" during a period.

Non -current portions of long-term receivables due to governmental funds are reported on their balance sheets despite their spending measurement focus. However, special reporting treatments indicate that they should not be considered "available spendable resources" since they do not represent current resources. 40

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Due to their spending measurement focus, expenditure recognition for governmental fund types excludes amounts represented by non -current liabilities. Therefore, since they do not affect current resources, long-term amounts are not recognized as governmental fund -type expenditures or liabilities.

Amounts to acquire capital assets are recorded as expenditures in the year that resources were expended rather than as fund assets. Long-term debt proceeds are recorded as other financing sources rather than a fund liability.

Amounts paid to reduce long-term indebtedness are reported as fund expenditures.

When both restricted and unrestricted resources are combined in a fund, expenditures are considered to be paid first from restricted resources, and then from unrestricted resources.

Proprietary Funds
The City's enterprise funds, and internal service funds are proprietary funds. The proprietary fund financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The main operating revenues of the enterprise funds and the government's internal service funds are charged to customers for services. Operating expenses for the proprietary funds include the cost of services, administrative fees, and depreciation of capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

Fiduciary Funds
The private purpose trust fund is reported using the economic resources measurement focus and the accrual basis of accounting. Accordingly, the fiduciary fund is excluded from the government -wide financial statements.

Fund Classifications
The City reports the following major governmental funds:

The General Fund is the primary operating fund of the City. The General Fund accounts for revenue and expenditures traditionally associated with the government but is not legally required or by sound financial management to be accounted for in another fund. The revenues and expenditures are often referred to as discretionary, meaning they can be allocated as directed by the City Council. The fund's primary revenues are transit occupancy, property, and sales tax. Most of the City's administrative and operating costs, such as salaries, benefits, professional consultants, supplies, and charitable contributions, are paid out of the General Fund.

The Housing Authority Fund is used to account for the housing activity of the former Redevelopment Agency for the benefit of providing low- and moderate -income housing in Indian Wells. The Indian Wells Housing Authority was created to promote and encourage affordable housing units' retention, rehabilitation, and development. The fund's revenue sources include investment income. Revenues are restricted by government code for funding housing units to benefit low- and moderate -income households. 41

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
The Emergency Services Upgrade Fund is used to accumulate the resources from a special fire tax levied and restricted to enhance fire protection, suppression, fire prevention, fire investigation, fire safety education, and paramedic services.

The Capital Improvement Fund is used to account for the transfer of monies from the General Fund for the acquisition and construction of general governmental capital projects.

The City Streets Capital Reserve Fund establishes reserve funding for streets throughout the City. Funding allows for various maintenance projects to extend the city roadways' life. In addition, the City follows the Pavement Management Program (PMP) to identify street projects in slurry seal, overlay, and reconstruction.

The Park Facilities in Lieu Fund is used to account for collection of fees to fund the construction of parks.

The City reports the following major enterprise fund:

The Golf Resort Operations Fund accounts for the Indian Wells Golf Resort operations. Customer purchases received by the course will be used to support the day-to-day activities of the golf course.

The City's fund structure also includes the following fund types:

The Proprietary Fund - Internal Service Funds account for employee benefits activities and services performed for other departments within the City on a cost reimbursement basis.

The Fiduciary Fund - Private Purpose Trust Fund is used to account for the assets and liabilities of the former redevelopment agency and is allocated revenue to pay estimated installment payments of enforceable obligations until obligations of the former redevelopment agency are paid in full and assets have been liquidated.

Cash and Investments
Investments are reported in the accompanying balance sheet at fair value, except for specific certificates of deposit and investment contracts registered at cost. These investments are not transferable, and they have terms that are not affected by changes in market interest rates. Therefore, investment income includes interest earnings and the net increase (decrease) in the fair value of investments.

The City categorized the fair value measurements for its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 42

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
The City pools cash and investments of all funds, except for amounts held within the Section 115 trust, amounts held by fiscal agents, and amounts held by management companies for the Indian Wells Golf Resort, Indian Wells Villas, and Mountain View Villas. Each fund's share in this pool is displayed as pooled cash and investments in the accompanying financial statements. Investment income earned by the pooled investments is allocated to the various funds based on each fund's average cash and investment balance.

Cash and Cash Equivalents
For the statement of cash flows, cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Cash equivalents have an original maturity date of three months or less from the date of purchase. Cash equivalents also represent the proprietary funds' share in the cash and investment pool of the City.

Restricted Section 115 Trust Cash and Investments
All assets in the Section 115 Trust are irrevocably dedicated to funding obligations of the City's pension beneficiaries, other post -employment beneficiaries or costs of administering the Trust. The funds are not considered plan assets of either the pension plan or OPEB plan and are therefore considered restricted assets of the City.

Capital Assets
Capital assets, including property, plant, equipment, infrastructure, and intangible assets, are reported in the government -wide financial statements applicable governmental or business -type activities columns. Capital assets, other than infrastructure assets, are defined by the government as assets with an initial, individual cost of more than $5,000 and an estimated useful life of over three years. The City has made one exception to this basic rule. All computer and computer -related equipment purchases will not be capitalized. The government reports infrastructure assets on a network and subsystem basis. Accordingly, the amounts spent for constructing or acquiring infrastructure assets are capitalized and reported in the government -wide financial statements.

As the government constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes routine maintenance and repairs, which are actual amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. In the case of donations, the government values these capital assets at the acquisition value of the item at the date of its donation.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the government -wide financial statements. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the respective balance sheet. The ranges of lives used for depreciation purposes for each capital asset class are as follows:
43

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Building and Improvements
Equipment
Infrastructure
Intangible Assets
Right to Use Assets
10-50 years
3-15 years
5-60 years
Depreciated over contractual life
The estimated life of the lease asset or
the contract term whichever is shorter
Intangible assets are amortized over their contractual useful lives using the straight-line method in government - wide financial statements. Amortization is charged as an expense against operations and accumulated amortization is reported on the respective balance sheet.

Deferred Outflows/Inflows of Resources
The City reports deferred outflows and inflows of resources. A deferred outflow of resources is a consumption of net assets the government that is applicable to a future reporting period. A deferred inflow of resources represents an acquisition of net assets by the government that is applicable to a future period.

The City reports deferred outflows and inflows of resources related to pensions and other post -employment benefits on the government -wide statement of net position and the proprietary fund's statement of the net position under the full accrual basis of accounting. Refer to Notes 9 and 12 for items identified as deferred inflows and outflows related to pension and other post -employment benefits, respectively, as of June 30.

Property Taxes
Property taxes attach as an enforceable lien on the property as of January 1. Taxes are levied on July 1, payable in two equal installments due November 1 and February 1, respectively, and delinquent if not paid by December 10 and April 10, respectively. The County of Riverside bills and collects the property taxes and remits them to the City in installments during the year. All material amounts associated with the reporting period are collected soon enough to be considered "available" to finance the expenditures of the reporting period.

The County of Riverside is permitted by State law (Proposition 13) to levy taxes at one percent of total market value (at time of purchase). It can increase the assessed values by no more than two percent annually. The City receives a share of this basic levy proportionate to what was received from 1976 to 1978.

The City of Indian Wells is one of thirty-nine cities in the State of California categorized as a No/Low property tax city because the City did not have an established property tax rate before Proposition 13. Cities without an established tax rate received the minimum tax rate formula. The rate has increased over time from 1% of the 1% of the assessed valuation to the maximum of 7% of the 1% of the assessed valuation. 44

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
After applying the formula, the City receives approximately 4.6% (net) of the property tax. This means that for every $100 of property tax collected by the County, the City receives $4.60. Therefore, as a No/Low city, Indian Wells receives only about half the property tax as other cities receive.

Inventory
Inventory in the Golf Resort Operations Enterprise Fund is carried at cost using the consumption method on a first -in, first -out basis.

Prepaid Costs
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government -wide and fund financial statements. The City uses the consumption method to record prepaid costs.

Compensated Absences
Governmental and Business -Type funds recognize the vested vacation and compensatory time as an expenditure in the current year to the extent it is paid during the year. Accrued vacation and compensatory time relating to governmental and business -type funds is included as a liability in the long-term liabilities as those amounts are payable from future resources.

The liability for compensated absences is reported in the government -wide financial statements and represents the amount that is due to employees for unused vacation and sick leave that has vested. The liability is calculated using current pay rates and includes employer -paid fringe benefits.

Fund Balances
In the fund financial statements, governmental funds report the following fund balance classifications:
• Nonspendable include amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. • Restricted include amounts that are constrained on the use of resources by either (a) external creditors, grantors, contributors, or laws or regulations of other governments or (b) by law through constitutional provisions or enabling legislation.
• Committed include amounts that can only be used for specific purposes according to constraints imposed by formal action of the City's highest authority, the city council. The formal action that is required to be taken to establish, modify, or rescind a fund balance commitment is by resolution. • Assigned include amounts constrained by the City's intent to be used for specific purposes but are neither restricted nor committed. The City Manager and Finance Director are authorized to assign amounts to a particular purpose, established by the governing body in Resolution No. 2011-30. 45

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
• Unassigned classification is to be used when negative residual resources are in excess of what can be appropriately classified as nonspendable, restricted, committed, or assigned in funds outside the General Fund. Within the General Fund, the unassigned classification represents the residual amounts that have not been restricted, committed, or assigned to specific purposes.

A guiding principle of the City is to maintain an unassigned fund balance in the general fund at fiscal year-end of not less than 25 percent of the operating budget. In addition, the City Council intends to limit the use of fund balances in the General Fund to address unanticipated one-time needs.

The City maintains a contingency reserve of $2,250,000 in the unassigned General Fund balance. The purpose of this reserve is to meet unexpected circumstances, such as a General Fund revenue shortfall.

Net Position and Fund Balance Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. To calculate the amounts to report as restricted — net position and unrestricted — net position in the government -wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. The City's policy considers the restricted — net position to have been depleted before the unrestricted — net position is used.

Sometimes the City will fund outlays for a particular purpose from restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). To calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. The City's policy is to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of the unrestricted fund balance can be used for the same purpose, the committed fund balance is depleted first, followed by the assigned fund balance. The unassigned fund balance is applied last.

Use of Estimates
Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Accordingly, actual results could differ from those estimates.

Leases
At the commencement of the lease, the City initially measures the lease payable at the present value of payments expected to be paid during the lease term. Subsequently, the lease payable is reduced by the principal portion of lease payments made.
46

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Key estimates and judgments include how the City determines the discount rate it uses to discount the expected lease payments to present value.
• The City used the incremental borrowing rate for leases. • The lease term includes the noncancellable period of the lease.

The City monitors changes in circumstances that would require a remeasurement of its leases and will remeasure the lease pay certain changes occur that are expected to significantly affect the amount of the lease payable.

Pension
In government -wide financial statements, the retirement plan (pension) is required to be recognized and disclosed using the accrual basis of accounting, regardless of the amount recognized as pension expenditures on the governmental fund statements, which use the modified accrual basis of accounting.

In general, the City recognizes a net pension liability, which represents the City's proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial report provided by the California Public Employees' Retirement System (CaIPERS). The net pension liability is measured as the City's prior fiscal year-end. Changes in the net pension liability are recorded in the period incurred as pension expense or as deferred inflows of resources or deferred outflows of resources, depending on the nature of the change. The changes in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or experience) are amortized over the weighted average remaining service life of all participants in the respective pension plan. They are recorded as a component of pension expenses beginning with the period in which they are incurred.

For purposes of measuring the net pension liability and deferred outflows/inflows of resources relating to pensions and pension expenses, information about the fiduciary net position of the City's pension plan with CaIPERS and additions to/deductions from the plan's fiduciary net position have been determined on the same basis as CaIPERS reports them. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the terms of the benefit. Investments are reported at fair value.

Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred. Each subsequent year will incorporate an additional closed basis five-year period of recognition.
47

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 1- Significant Accounting Policies (continued)
Other Post -Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis.

For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Generally accepted accounting principles require that the reported results pertain to liability and asset information with specific timeframes. Accordingly, for this report, the following timeframes are used:

Valuation Date
Measurement Date
Measurement Period
New Accounting Pronouncements
Effective in Current Year
June 30, 2023
June 30, 2023
July 1, 2022 to June 30, 2023
• GASB Statement 100 — "Accounting Changes and Error Corrections — an Amendment of GASB Statement No. 62", effective for reporting periods beginning after June 15, 2023; • GASB Statement 101 — "Compensated Absences", effective for reporting periods beginning after December 15, 2023;
Effective in Future Years
The City is evaluating the potential impact of the following issued, but not yet effective, accounting standards. • GASB Statement 102 — "Certain Risk Disclosures", effective for reporting periods beginning after June 15, 2024;
• GASB Statement 103 — "Financial Reporting Model Improvements", effective for reporting periods beginning after June 15, 2025.
• GASB Statement 104 — "Disclosure of Certain Capital Assets", effective for fiscal years beginning after June 15, 2025.
48

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments
Cash and investments at June 30, 2024, are classified in the accompanying financial statements as follows:

Governmental Business -Type Fiduciary
Activities Activities Activities Total
Cash and investments
Restricted assets
Restricted cash and
investments
$ 79,669,717 $ 653,208 $ 8,088,306 $ 88,411,231
17,562,943
590 17,563,533
$ 97,232,660 $ 653,208 $ 8,088,896 $ 105,974,764
Cash and investments at June 30, 2024, consisted of the following:

Petty cash
Demand accounts
Investments
Total cash and investments
$ 2,000
8,379,004
97,593,760
$ 105,974,764
Investments Authorized by the California Government Code and the City's Investment Policy The table on the next page identifies the investment types authorized for the City by the California Government Code or the City's investment policy. The table also identifies certain provisions of the California Government Code or the City's investment policy that address interest rate risk, credit risk, and concentration of credit risk. This table does not manage investments of debt proceeds held by bond trustee that is governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy.
49

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments (continued)
Investment Types
U.S. Treasury Bills, Bonds and Notes
Federal Agency Securities
Local Agency Bonds
State of California Obligations
California Local Agency Obligations
Money Market Funds
Maximum Maximum
Maximum Percentage Investment
Maturity Allowed in One Issuer
5 Years*
5 Years*
5 Years*
5 Years*
5 Years*
N/A
Certificate of Deposit and Negotiable
Certificates of Deposit 5 Years
Repurchase Agreements
Medium -Term Corporate notes
Local Agency Investment Fund (LAIF)
30 Days
5 Years
N/A
70% N/A
70% N/A
30% $ 5,000,000
30% $ 5,000,000
30% $ 5,000,000
20% 10% per
Single Issue
30% $ 250,000
Per Issuer
10% $ 2,000,000
30% $ 3,000,000
70% $ 30,000,000
per Entity
* Per the City's Investment Policy, the portfolio shall equal the amount of two years current General Fund operating reserves maturing at no more than five years from the date of the purchase. Once this requirement is met, a maximum of 30% of the total portfolio may be invested in maturities greater than five years, but not exceeding 10 years consisting of those investments listed in Government Code Section 53601 where there is no limitation specified therein regarding the term or remaining maturity of the instrument. Investments greater than five years from the date of purchase shall be brought to the City Council for review and approval prior to purchase.

Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustee are governed by provisions of the debt agreements and the general provisions of the California Government Code, rather than the City's investment policy. Investments authorized for funds held by fiscal agent include U.S. Treasury Obligations, U.S. Government Sponsored Entities Securities, Certificates of Deposits, Commercial Paper, Local Agency Bonds, Money Market Mutual Funds, Investment Contracts, and Repurchase Agreements. There are no limitations on the maximum amount that can be invested in one issuer, the maximum percentage allowed or the maximum maturity of an investment, except for the maturity of Banker's Acceptance which are limited to one year.

Investments Authorized by the City Section 115 Trust
Trust investments are governed by the City of Indian Wells Section 115 Trust Agreement rather than the general provisions of the California Government Code or the City's investment policy. Investments authorized for funds held in the Section 115 Trust include Equity and Fixed Income Mutual Funds. The strategic range allowed for Equity and Fixed Income Mutual Funds is 50-70% and 30-50%, respectively. There are no limitations on the maximum amount that can be invested in one issuer or the maximum maturity of an investment. 50

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments (continued)
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer an investment's maturity, the greater its fair value sensitivity to changes in market interest rates. Accordingly, one of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter -term and longer -term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City's investments (including investments held by fiscal agents) to market interest rate fluctuations is provided in the following table that shows the distribution of the City's investments by maturity:

Remaining Maturity (in Months)
Type of Investment
Federal Agency Securities
Negotiable Certificates of Deposit
Local Agency Investment Fund
Medium Term Corporate Notes
Local Agency Bonds
U.S. Treasury Obligations
Section 115 Trust
PARS Balanced Index Investment Pool
Section 115 Trust (Charles Trust)
Money Market Mutual Funds
Mutual Funds
Exchange Traded Funds
Held by Fiscal Agent
Money Market Mutual Funds
Total
Fair Value Classifications
12 Months
or Less 13 - 36 Months 37 - 60 Months Total
$ 5,643,628 $ 9,377,610 $ 1,969,220 $ 16,990,458
2,687,451 1,622,603 3,438,375 7,748,429
5,016,753 - - 5,016,753
1,942,070 4,562,070 995,740 7,499,880
497,975 287,160 - 785,135
7,212,890 - 23,337,830 30,550,720
5,183,382 - - 5,183,382
1,102,809 - - 1,102,809
1,948,722 - - 1,948,722
2,772,596 - - 2,772,596
17,994,876 - - 17,994,876
$ 52,003,152 $ 15,849,443 $ 29,741,165 $ 97,593,760
Fair value measurements are categorized based on the valuation inputs used to measure fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments categorized as Level 2 are valued using the market approach using quoted market prices of similar assets.
51

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments (continued)
Investments' fair value measurements are as follows as of June 30, 2024:

Investment
Federal Agency Securities
Medium Term Corporate Notes
Negotiable Certificates of Deposit
U.S. Treasury Obligations
Local Agency Bonds
Local Agency Investment Fund
Section 115 Trust
PARS Balanced Index Investment Pool
Section 115 Trust (Charles Trust)
Money Market Mutual Funds
Mutual Funds
Exchange Traded Funds
Held by Fiscal Agent
Money Market Mutual Funds
Level 1 Level 2
$
$
Level 3 Fair Value
$ 16,990,458 $
7,499,880
7,748,429
30,550,720
785,135
- $ 63,574,622 $
$ 16,990,458
7,499,880
7,748,429
30,550,720
785,135
63,574,622
5,016,753
5,183,382
1,102,809
1,948,722
2,772,596
17,994,876
Total Investment Portfolio $ 97,593,760
Investments in LAIF are uncategorized as deposits, and withdrawals are made on the basis of $1, and not fair value. Money market mutual funds are valued at a net asset value of $1 dollar per share (amortized cost) and are uncategorized in the fair value hierarchy.

Disclosures Relating to Credit Risk
Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the investment. The assignment of a rating measures this by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City's investment policy, or debt agreements, and the Standards and Poor's credit rating as of year-end for each investment type:
52

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments (continued)
Investment Type
Minimum
Legal Total as of
Rating June 30, 2024 Not Rated AAA AA+ to AA- A+ to A - Federal Agency Securities
Negotiable Certificates of Deposit
Local Agency Investment Fund
Medium Term Corporate Notes
U.S. Treasury Obligations *
Local Agency Bonds
Section 115 Trust
PARS Balanced Index Investment Pool
Section 115 Trust (Charles Trust)
Money Market Mutual Funds
Mutual Funds
Exchange Traded Funds
Held by Fiscal Agent
Money Market Mutual Funds
Total
N/A - Not applicable
* - U.S. Treasury Obligations are Exempt from rating
Concentration of Credit Risk
Investments in any one issuer that represent five percent or more of total City's investments are as follows:

N/A $ 16,990,458 $ $ 16,990,458 $ - $ -
N/A 7,748,429 7,748,429 -
N/A 5,016,753 5,016,753 -
A 7,499,880 972,750 - 2,741,720 3,785,410
N/A 30,550,720
A 785,135 - - - 785,135
N/A 5,183,382 5,183,382 - - -
N/A 1,102,809 1,102,809
N/A 1,948,722 1,948,722
N/A 2,772,596 2,772,596
A 17,994,876 - - 24,269,169
$ 97,593,760 $ 24,745,441 $ 16,990,458 $ 27,010,889 $ 4,570,545 Issuer
Federal Home Loan Bank
Custodial Credit Risk
Investment
Type
Reported Percent of
Amount Portfolio
Federal Agency Securities $ 13,030,578 13%
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker -dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City's investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:

The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.
53

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 2 - Cash and Investments (continued)
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF), which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro -rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not registered with the Securities and Exchange Commission and is not rated.

Note 3 - Accounts Receivable
Receivables at June 30, 2024, are composed of the following:

Other Taxes
Receivable Receivable Interest Total
Governmental Activities:

General Fund
Housing Authority Fund
Emergency Services Upgrade Fund
Capital Improvements Fund
City Streets Capital Reserve Fund
Nonmajor Governmental Funds
Internal Service Funds
Total Governmental Funds
Business -type Activities
Golf Course Operations
Note 4 - Notes Receivable
$ 276,567 $ 1,700,269 $ 42,097 $ 2,018,933
133,938 133,938
1,073, 008 18,296 20,298 1,111, 602
16,001 - 50,133 66,134
69,723 69,723
67,498 178,805 58,101 304,404
- 8,250 8,250
$ 1,433,074 $ 1,897,370 $ 382,540 $ 3,712,984
$ 316,954 $ - $ 433 $ 317,387
Governmental Activities
Indian Wells Village Utility Undergrounding
Club Drive Property Sale
Outstanding at
June 30, 2024
$ 105,675
1,022,068
$ 1,127,743
54

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 4 - Notes Receivable (continued)
The notes issued relating to the Indian Wells Village Utility Undergrounding relate to the costs the City covered for the tenants of the Indian Wells Village to run electricity from the streets up to the individual properties. The tenants are responsible for repaying the City. The notes are due and payable in full on the earlier of (i) the date of any transfer not authorized by the Lender; (ii) the date of any default; or (iii) twenty years from the effective date of the Loan Agreement. The outstanding principal balance bears simple interest at the rate of one percent per annum, and if a default occurs, interest on the principal balance shall accrue at the lesser of ten percent compounded annually or the maximum amount permitted by law from the date of default to the date of repayment in full of the disbursed principal amount of the loan and any interest due thereon. The notes are secured by a Deed of Trust against the Property.

The note issued relating to the Club Drive Property sale at 45200 Club Drive to Indian Wells Medical Offices, LLC is amortized over 20 years commencing on May 1, 2018. During the fiscal year 2020-21, the City granted Indian Wells Medical Offices, LLC a three-month payment deferral due to economic hardship during the coronavirus pandemic. The final payment of the note is due and payable on July 1, 2038. Payments are due monthly in the amount of $8,703. Prepayment in full of the principal sum plus a $50,000 premium is allowed within the five years following the date of this note. No penalty or premium is due for prepayment following the initial five years of the note. The note is secured by a deed of Trust against the property.

Note 5 - Due to and Due from Other Funds
Interfund receivables and payable balances at June 30, 2024, are as follows:

Due to Other Funds
Park Facilities in Lieu Fund
Monmajor Governmental Funds
Park Facilities in Lieu Fund
Capital Improvements Fund
Golf Resort Fund
Due From Other Funds
General Fund
General Fund
Capital Improvements Fund
Golf Resort Fund
General Fund
Amount
$ 879,933
929,871
506,804
503,804
1,094,446
$ 3,914,858
The General Fund Receivable from the Park Facilities in Lieu Fund of $879,933 represents monies advanced to the Park Facilities in Lieu Fund for certain construction at the Golf Resort. As Park -in -Lieu fees are collected, the advance will be paid down. The advance is estimated to be paid off in 18 years based on the development of certain commercial projects along the Highway 111 corridor.

The General Fund Receivable from the Nonmajor Governmental Funds includes $151,692 advanced to the Transportation Facilities Fees Fund to fund contributions for annual debt obligations, $592,852 was advanced to the Recreation Facilities Fees Fund to fund contributions for annual debt obligations, and $185,327 was advanced to the Citywide Public Improvement Fees Fund to fund contributions for annual debt obligations. These advances are estimated to be paid as fees are collected, anticipated with the next fiscal year. 55

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 5 - Due to and Due from Other Funds (continued)
The Capital Improvements Fund Receivable from the Park Facilities in Lieu Fund of $506,804 represents monies advanced to the Park Facilities in Lieu Fund for parkland acquisition. As Park -in -Lieu fees are collected, the advance will be paid down. The advance is estimated to be paid off in 18 years.

The Golf Resort Operations Fund Receivable from the Capital Improvements Fund of $503,804 represents monies advanced to the Capital Improvements Fund for certain construction at the Golf Resort. The advance is estimated to be paid as funds become available, anticipated to be within five years.

The General Fund Receivable from the Golf Resort Operations Fund of $1,094,446 represents monies advanced to the Golf Resort Operations Fund for certain construction at the Golf Resort. The advance is estimated to be paid as funds become available, anticipated to be within five years.

The amount due to the City reported in the accompanying financial statements consisted of the following:

Due to
General Fund
Due from Amount
Successor Agency $ 11,600,000
In a letter dated November 22, 2013, from the California Department of Finance, the loan between the Successor Agency and the City of Indian Wells for $16,400,000 was determined to be for legitimate redevelopment purposes and therefore, approved as an enforceable obligation.

Note 6 - Interfund Transfers
Transfers in and out for the year ended June 30, 2024, are as follows:

Transfer Out of Fund
General Fund
Housing Authority
General Fund
Emergency Services Upgrade Fund
Non -major Governmental Funds
General Fund
Non -major Governmental Funds
General Fund
Non -major Governmental Funds
General Fund
Transfer In to Fund
Housing Authority Fund
Non -major Governmental Funds
City Streets Capital Reserve
Non -major Governmental Funds
Non -major Governmental Funds
Capital Improvements Fund
Capital Improvements Fund
Non -major Governmental Funds
Park Facilities in Lieu Fund
Compensated Absences Reserve Fund
Amount
$ 517,445
806, 269
162, 500
146,616
742,853
1,250,000
4,843,037
1,392,524
31,083
102,584
$ 9,994,911
56

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 6 - Interfund Transfers (continued)
The General Fund transferred $517,445 to the Housing Authority Fund for the 20% set aside portion of the Redevelopment Property Tax Trust Fund (RPTTF) Loan repayments for the year consistent with Housing Law.

The Housing Authority Fund transferred $806,269 to the Housing Authority's affordable housing communities, Indian Wells Villas and Mountain View Villas, respectively.

The Emergency Services Upgrade Fund transferred $146,616 to the Non -major Governmental Funds for the annual debt service contribution.

The Transportation Facilities Fund, the Recreation Facilities Fund and the Citywide Public Improvement Fund transferred $742,853 to the Non -major Governmental Funds for the annual debt service contribution.

The General Fund transferred $1,250,000 to the Capital Improvements Fund for the annual contribution for future city streets projects.

The Financing Authority Fund transferred $4,843,037 in bond proceeds to the Capital Improvements Fund to reimburse energy efficiency, infrastructure, and roadway capital projects.

The Park Facilities Fund transferred $31,083 to the Park Facilities in Lieu Fund for the Fairway park expansion project.

The General Fund transferred $1,555,024 to the City's Capital Improvement Fund for ongoing capital projects.

The General Fund transferred $102,584 to the Compensated Absences Fund to fully fund the fiscal year 2023-24 liability.
57

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 7 - Capital Assets
Capital asset activity for the year ended June 30, 2024, was as follows:

Balance at Balance at
July 1, 2023 Additions Deletions Transfers June 30, 2024 Governmental Activities
Capital assets, not being depreciated
Land
Construction in progress
Total capital assets, not
being depreciated
Capital assets, being depreciated
Intangible
Buildings and improvements
Equipment
Infrastructure
Total capital assets, not
being depreciated
Less accumulated depreciation
Intangible
Buildings and improvements
Equipment
Infrastructure
Total accumulated depreciation
Total capital assets being
depreciated, net
Governmental activities
capital assets, net
$ 33, 289, 388
6,612,312
$
1,311,432
39,901,700 1,311,432
2,500,000
67, 286, 071
2,033,803
115, 991, 782
187, 811, 656
296,757
2,805,531
$
(1,001,557)
(689,303)
3,102, 288 (1,690,860)
(250,000) (250,000) -
(32,705,925) (1,621,120) 42,714
(1,647,137) (160,723) 682,870
(41,108,163) (2,116,057) 567,928
$ $ 33, 289, 388
(339,376) 7,584,368
(339,376) 40,873,756
2,500,000
(601,433) 65,683,081
1,641,257
940,809 119, 738,122
339,376 189,562,460
- (500,000)
43,142 (34, 241,189)
- (1,124,990)
(43,142) (42,699,434)
(75,711,225) (4,147,900) 1,293,512 - (78,565,613)
112,100,431
(1,045,612) (397,348)
339,376 110,996,847
$ 152, 002,131 $ 265,820 $ (397, 348) $ - $ 151, 870, 603 58

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 7 - Capital Assets (continued)
Balance at Balance at
July 1, 2023 Additions Deletions Transfers June 30, 2024 Business -type Activities
Capital assets, not being depreciated
Land
Construction in progress
Total capital assets, not
being depreciated
Capital assets, being depreciated
Buildings and improvements
Equipment
Infrastructure
Right to use asset
Total capital assets, not
being depreciated
Less accumulated depreciation
Buildings and improvements
Equipment
Infrastructure
Right to use asset
Total accumulated depreciation
Total capital assets being
depreciated, net
Business -type activities
capital assets, net
Depreciation Expense
$ 13,910,956 $
$
$ - $ 13,910,956
13,910,956 - - - 13,910,956
85,713,772 (492,536) (223,173) 84,998,063
4,496,222 512,746 (44,553) 223,173 5,187,588
433,390 - - - 433,390
555,109 - 555,109
91,198, 493 512,746 (537, 089) 91,174,150
(56,556,844) (1,841,376)
(3,261,641) (539,327)
(122,793) (7,223)
(240,121) (138, 669)
(60,181,399) (2,526,595)
31,017,094 (2,013,849)
286,665
44,499
(58,111, 555)
(3,756,469)
(130,016)
(378, 790)
331,164 - (62,376,830)
(205,925) - 28,797,320
$ 44,928,050 $ (2,013,849) $ (205,925) $ - $ 42,708,276 Depreciation expense was charged to the following functions in the statement of activities:

Governmental Activities
General government
Community development
Public safety
Public works
$ 322,366
1,365,228
169,035
2,291,271
Total governmental activities $ 4,147,900
Business -type Activities
Golf resort operations $ 2,526,595
59

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 8 - Long -Term Liabilities
The changes in long-term liabilities for the year ended June 30, 2024, were as follows:

Balance at Balance at Due Within
July 1, 2023 Additions Reductions June 30, 2024 One Year Governmental activities:

Compensated absences* $ 736,891 $ 402,078 $ (416,822) $ 722,147 $ 168,566 2022 Lease revenue bonds 13,550,000 (470,000) 13,080,000 495,000 Premium 1,249,696 - (66,356) 1,183,340 66,356
$ 15,536,587 $ 402,078 $ (953,178) $ 14,985,487 $ 729,922 * Beginning balance restated to reflect the implementation of GASB 101.

Balance at Balance at Due Within
July 1, 2023 Additions Reductions June 30, 2024 One Year Business -type activities:

Compensated absences* $ 199,139 194,835 (48,501) 345,473 86,368 Lease payable 330,461 (140,554) 189,907 81,732
$ 529,600 $ 194,835 $ (189,055) $ 535,380 $ 168,100
* Beginning balance restated to reflect the implementation of GASB 101.

Compensated Absences
The City's policies relating to compensated absences are described in Note 1. The City reserves the outstanding compensated absences liability in the Compensated Absences Fund. The long-term strategy of the Compensated Absences Reserve Fund is to set aside cash reserves in case of changes in staff. On June 30, 2024, the net position of the Compensated Absences Reserve Fund was $758,898.

Several distinct types of paid leave accrue to full-time employees. These include vacation, holiday, administrative leave, sick leave, and compensatory time accruals. Employee leave accruals are governed by the Memorandum of Understandings (MOUs), personnel contracts, and the Personnel Rules and Regulations.

City Issued Debt
2022 Lease Revenue Refunding Bonds
In February 2022, the Indian Wells Financing Authority issued lease revenue bonds in the amount of $13,930,000 to provide funds to finance public improvements and energy efficiency improvements in the City. The bonds dated February 10, 2022, were issued at a premium of $1,338,171 are payable semiannually on April 1 and October 1 of each year, commencing October 1, 2022, and mature in 2042. The bonds are payable from base rental payments to be made by the City for the right to the use of certain real property and improvements of the City pursuant to a Lease Agreement dated February 1, 2022. The balance at June 30, 2024, including the unamortized bond premium of $1,183,340 amounted to $14,263,340. The annual requirements to amortize the outstanding bond indebtedness as of June 30, 2024, including interest, are as follows:
60

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 8 - Long -Term Liabilities (continued)
Year Ending June 30, Principal Interest Total
2025 $ 495,000 $ 471,550 $ 966,550
2026 515,000 446,800 961,800
2027 545,000 421,050 966,050
2028 570,000 393,800 963,800
2029 600,000 365,300 965,300
2030-2034 3,455,000 1,367,100 4,822,100
2035-2039 4,145,000 672,700 4,817,700
2040-2043 2,755,000 138,875 2,893,875
Bond Premium
13,080,000
1,183,340
4,277,175
17,357,175
1,183,340
$ 14,263,340 $ 4,277,175 $ 18,540,515
The outstanding bonds contain a provision that if any event of default should occur, the Trustee, as assignee of the Authority under the Lease Agreement, may terminate the Lease Agreement and recover certain damages from the City or may retain the Lease Agreement and hold the City liable for all base rental payments thereunder on an annual basis.

Lease Payable
The Golf Fund has maintenance equipment, office equipment, and GPS Units as a lease payable with lease terms ranging from 36 months to 60 months. The City is required to make monthly payments ranging from $5,124 to $6,160 with discount rates ranging from 5.49% to 7.00%. As of June 30, 2024, the value of the lease payable is $189,907. Future lease payable requirements are as follows:

Year Ending June 30, Principal
Interest Total
2025 $ 81,732 $ 9,417 $ 91,149
2026 65,756 4,632 70,388
2027 42,068 957 43,025
2028 351 6 357
$ 189,907 $ 15,012 $ 204,919
61

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 9 - Defined Benefit Pension Plan
Miscellaneous Plan
Description of Plan
All qualified permanent and probationary employees are eligible to participate in the City of Indian Well's Employee Pension Plan, a cost -sharing multiple -employer defined benefit pension plan administered by the California Public Employees Retirement System (CaIPERS). Employees hired before January 1, 2013, and those who have CaIPERS credited service prior to that date who are hired by the City less than six months after separation from that CaIPERS contracting employer are "Classic" members with a classic formula benefit.

Employees hired on or after January 1, 2013, or who separated from a CaIPERS contracting employer more than six months prior to their date of hire with the City are "New" or "PEPRA" members with a PEPRA formula benefit.

The CaIPERS Plan consists of separate miscellaneous pools for Classic and PEPRA members, and separate safety pools for both Classic and PEPRA members (referred to as "risk pools"), which are comprised of individual employer miscellaneous and safety rate plans, respectively. The City does not participate in the CaIPERS safety plans. The risk pools are included within the Public Employees' Retirement Fund C (PERF C). Benefit provisions under the Plan are established by State statute under the Public Employees' Retirement Law (PERL), where optional provisions may be adopted by amendment of the City's CaIPERS contract if not added at contract inception. CaIPERS issues publicly available reports that include a complete description of the pension plans regarding benefit provision, assumption, and membership information. Copies of the reports can be found on the CaIPERS website.

Benefits Provided
CaIPERS provides service retirement, disability, and pre -retirement death benefits, credited service for unused sick leave, and the annual cost of living adjustments for plan members, who must be public employees or beneficiaries. Benefits are based on years of credited service, where 1,720 compensated hours in a fiscal year equates to one year of credited service. After achieving five years of total credited service, classic members are eligible to retire at age 50, and PEPRA members are eligible to retire at age 52, both with statutorily reduced benefits. All members are eligible for non -duty disability benefits after ten years of service. The pre -retirement death benefit is one of the following: The Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost -of -living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.

The Plans' provisions and benefits in effect at June 30, 2024 are summarized below:

Miscellaneous Plan
Classic Members PEPRA Members
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of eligible compensation
Required employee contribution rates
Required employer contribution rates*

2.7%@55 2%@62
5 years of credited service
monthly for life
50 and up

2.0% to 2.7%

8.00%

16.87%
5 years of credited service
monthly for life
52 and up
1% to 2.5%

8.25%

8.00%
62

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 9 - Defined Benefit Pension Plan (continued)
*The percentage reflects the normal cost rate only. The portion of the required employer contribution that is attributed to amortization of the unfunded actuarial liability (UAL) for the miscellaneous plans is reflected as a fixed dollar value.

For the classic plan, for illustrative purposes only, the combined normal cost rate and the UAL payment reflected as a percentage of payroll equals as total of 16.87%.

For the PEPRA plan, for illustrative purposes only, the combined normal cost rate and the UAL payment reflected as a percentage of payroll equals as total of 8.00%.

Contribution Description
Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer contributes rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS' annual actuarial valuation process. The actuarial determination rate is the estimated amount necessary to finance costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

Pension Liabilities (Assets), Pension Expenses and Deferred Outflows/Inflows of Resources The City reported a net pension liability (asset) for its proportionate share of the net pension liability of the Miscellaneous Plan as of June 30, 2024, in the amount of $(1,089,114).

The City's net pension liability (asset) for the Miscellaneous Plan is measured as the proportionate share of the net pension liability of the collective cost -sharing plan. The City's net pension liability (asset) of the Plan is measured as of June 30, 2023, and the total pension liability for the Miscellaneous Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023 using standard updated procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plans relative to the projected contributions of all participating employers in those plans, actuarially determined. The City's proportionate share of the net pension liability (asset) for the Miscellaneous Plans as of the June 30, 2023 and 2024 measurement dates was as follows:

Proportion - June 30, 2023
Proportion - June 30, 2024
(0.01498%)
(0.02178%)
Change - Increase/(Decrease) (0.00680%)
63

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 9 - Defined Benefit Pension Plan (continued)
For the year ended June 30, 2024, the City recognized pension expense of $2,504,839 for the Miscellaneous Plan.

At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Pension contributions subsequent to measurement date
Changes of Assumptions
Changes in proportion and difference between City's
contributions and proportionate share of contributions
Net difference between projected and actual earnings
on pension plan investments
Difference between expected and actual experience
Difference between employer's contributions and
proportionate share of contributions
Deferred Outflows
of Resources
Deferred Inflows
of Resources
$ 1,124,057 $
2,541,882
8,631
65,755
235,199
176,337
55,638
746,227
3,674,570 $ 1,279,156
The amount of $1,124,057 reported as deferred outflows of resources related to contributions after the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2025. In addition, other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Deferred
Fiscal Year Outflows/(Inflows)
Ended June 30, of Resources
2025
2026
2027
2028
893,310
595,904
(255,569)
(5,060)
$ 1,228,585
Actuarial Assumptions
The total pension liabilities in the June 30, 2022, actuarial valuation was determined using the following actuarial assumptions.

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry -Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table 1 Derived using CaIPERS Membership Data for All Funds Post Retirement Benefit Increase The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter 64

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 9 - Defined Benefit Pension Plan (continued)
1 - The mortality table used was developed based on CaIPERS-specific data. The probabilities of mortality are based on the 2021 CaIPERS Experience Study for the period from 2001 to 2019. Pre -retirement and post -retirement mortality rates include generational mortality improvement using 80% of Scale MP -2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CaIPERS website.

All other actuarial assumptions used in the June 30, 2022 valuation were based on the results of the 2022 CaIPERS Experience Study and Review of Actuarial Assumptions, including updates to salary increase, mortality and retirement rates. The Experience Study report can be obtained at CaIPERS' website.

Discount Rate
The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CaIPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds' asset classes, expected compound (geometric) returns were calculated over the 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are summarized in the table on the following page:
65

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 9 - Defined Benefit Pension Plan (continued)
Asset Class (1)
Global Equity - Cap weighted
Global Equity - Non -Cap weighted
Private Equity
Treasury
Mortgage -backed Securities
Investment Grade Corporates
High Yield
Emerging Market Debt
Private Debt
Real Assets
Leverage
1An expected inflation of 2.30% used for this period
2 Figures are based on the 2021-22 Asset Liability Management study.

Assumed Asset Real
Allocation Return (1'2)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate 30%
12%
13%
5%
5%
10%
5%
5%
5%
15%
-5%

4.54%

3.84%

7.28%

0.27%

0.50%

1.56%

2.27%

2.48%

3.57%

3.21%
-0.59%
The following presents the City's proportionate share of the net pension liability (asset), calculated using the discount rate of 6.90 percent, as well as what the City's proportionate share of net pension liability (asset) would be if it were calculated using a discount rate that is 1 -percentage point lower (5.90 percent), or 1 -percentage point higher (7.90 percent), than the current rate:
1% Decrease in
Discount Rate
(5.90%)
Discount Rate
(6.90%)
1% Increase in
Discount Rate
(7.90%)
City's Proportionate Share of the
Plan's Net Pension Liability/(Asset) $ 4,072,930 $ (1,089,114) $ (5,337,919) Pension Plan Fiduciary Net Position
Detailed information about the Plan's fiduciary net position is available in a separately issued CaIPERS financial report.
66

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 10 - Defined Contribution Plan
The City contributes to the ICMA Retirement Corporation Prototype Money Purchase Plan and Trust, a defined contribution plan 401(a). The reportable payroll for the employees covered by the plan is $3,960,614 compared with a total payroll of $4,204,001 for the fiscal year ended June 30, 2024. The plan provisions are established and may be amended by the City Council.

All full-time employees are eligible to participate in the plan and benefits vest immediately. The required period of service is six months. Eligible employees at age 50 or more may begin to collect defined contribution benefits immediately upon retirement. The employer contribution is 2.5 percent of compensation, as that term is defined under the plan. No employee contributions are permitted. The total contribution made by the City was $117,365.

Contributions are established and amended by State Law and City Resolution.

Note 11 - Defined Compensation Payable
The City has adopted a deferred compensation plan in accordance with Internal Revenue Code Section 457(b) for its eligible employees wherein they may execute an individual agreement with the City for amounts earned by them to be paid at a future date when certain circumstances are met. These circumstances include death, disability, retirement, or an unforeseeable emergency. Employees may contribute to the deferred compensation plan up to $23,000 in 2024. Employees aged fifty or older may contribute up to an additional $7,500 in 2024 for a total of $30,500. These amounts are adjusted annually by the Internal Revenue Service (IRS) for cost -of -living increases. The City has no liability for losses under the plan but does have the duty of due care that would be required of an ordinary prudent investor.

On January 1, 1997, the City formally established a trust in accordance with IRC 457(g) for its deferred compensation plan for the exclusive benefit of plan participants and their beneficiaries. Accordingly, the deferred compensation assets placed in the Trust were not reported in the financial statements.

Note 12 - Other Post Employment Benefit Plan (OPEB)
The City participates in the Public Employees' Medical and Hospital Care Act ("PEMHCA") which is administered by CaIPERS in order to make health insurance coverage available to its employees. Pursuant to its contract with CaIPERS for participation in PEMHCA, the City is obligated to provide retiree health coverage to eligible retirees.

The City's retiree health liability is pre -funded through another post -employment benefit account ("OPEB Account") with the California Employers' Retiree Benefit Fund (CERBT) trust, which is also administered by CaIPERS. The CERBT trust is an agent multiple employer Section 115 governmental trust.

A summary of the OPEB amounts for the City's plan is shown below:

Net OPEB Liability
Deferred Outflows related to OPEB
Deferred Inflows related to OPEB
OPEB Expense
$ 7,235,393
2,332,129
(685,312)
491,028
67

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) Plan Description
The City provides retiree health benefits to all employees of the City that have retired, or will retire, from service with the City and meet the eligibility requirements set forth in Government Code Section 22760(c) to be considered an annuitant ("Annuitant"). The amount of the retiree health benefit allowance ("Allowance") available to an Annuitant is based on the date of hire as summarized below.

The Allowance is provided in two forms. The first is a direct payment to CaIPERS equal to the minimum employer contribution required pursuant to Government Code Section 22893(b) ("PEMHCA Minimum"). The PEMHCA Minimum for 2024 is $157 per month. If an Annuitant is eligible for a more significant retiree health benefit, the Annuitant will receive a reimbursement from a health reimbursement arrangement sponsored by the City for the health insurance premiums actually paid by the Annuitant in an amount not to exceed the difference between the applicable Allowance and the PEMHCA Minimum.

The amount of the Allowance depends on the tier for which the Annuitant is eligible as described below:
• Tier A Allowance:
o The allowance for Annuitants hired before February 1, 2009 ("Tier A") is equal to up to 100% of the premium of any CaIPERS health insurance plan in which the Tier A Annuitant, and eligible family members, enroll.
• Tier B Allowance:
o The allowance for Annuitants hired on or after February 1, 2009 but before July 1, 2020 who retire from the City with at least 10 years of CaIPERS service credit, including five years of service credit with the City ("Tier B") is equal to a percentage of the Government Code Section 22893 premium for the applicable coverage level based on years of CaIPERS service credit. The percentage is equal to 50% for the first 10 years of CaIPERS service credit, including five years of service credit with the City, plus an additional 5% for each additional year of service with any CaIPERS employer after satisfying the 10 year minimum.
• Tier C Allowance:
o The allowance for Annuitants hired on or after July 1, 2020, and employees hired by the City on or after February 1, 2009 but before July 1, 2020 that do not qualify for Tier B, is equal to the PEMHCA Minimum.

The amount of the Allowance is established through contracts between the City and the employee associations and may be amended by agreements between the City and the employee association.

The amount of the Allowance is established through contracts between the City and the employee associations and may be amended by agreements between the City and the employee association. 68

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) Employees Covered by Benefit Terms
At June 30, 2024, the most recent measurement date, the following current and former employees were covered by the benefit terms of the plan:

Active employees
Inactive employees or beneficiaries currently receiving benefits Contributions
31 37
68 The annual contribution to the City's OPEB Account is based on the actuarially determined contribution.

Employees do not make contributions to the OPEB Account but are responsible for the share of retiree health coverage that exceeds the value of the allowance. Contributions are typically paid by the Employee Benefits Fund.

The municipal administration employs a prioritized funding mechanism to finance the Employee Benefits Fund.

The foremost priority pertains to the accrued interest income within the fund, with the secondary priority being contingent on the allocation of payroll resources. The allocated payroll encompasses contributions from the Solid Waste Fund, the Emergency Services Fund, the Housing Authority, the Golf Resort, Recycling, and the General Fund. It is noteworthy that the General Fund assumes a prominent role as the primary source of funding for the Employee Benefits Fund due to its utilization of administrative services.

As described further in footnote 13, the City also contributes to the PARS and Shuster Advisory Group Section 115 Trusts with total assets at June 30, 2024 of $10,068,933 irrevocably restricted for the payment of OPEB benefits.

Net OPEB Liability
The City's net OPEB liability for the retiree health benefits was measured as the total OPEB liability, less the OPEB plan's fiduciary net position. The net OPEB liability was calculated as of June 30, 2024, using an annual actuarial valuation as of June 30, 2023. A summary of principal assumptions and methods used to determine the net OPEB liability is shown below.
69

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) Actuarial Assumptions
The total OPEB liability in the June 30, 2023, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Investment Rate of Return
Mortality
Healthcare Trend Rate
Entry -Age Normal Cost Method

5.75%

2.50%

5.75%
CalPERS 2000-2019 experience study
Non -Medicare - 8.50% for 2025, decreasing to an ultimate rate of 3.45% in 2076 and later years
Medicare (Non -Kaiser) - 7.50% for 2025, decreasing to an ultimate rate of

3.45% in 2076 and later years
Medicare (Kaiser) - 6.25% for 2025, decreasing to an ultimate rate of 3.45% in 2076 and later years
Mortality rates were based on the CaIPERS 2000-2019 Experience Study, which assumed future mortality improvements using Society of Actuaries (SOA) Scale MP -2021. The Experience Study report can be obtained on the CaIPERS website under Forms and Publications.

The actuarial assumptions used in the June 30, 2023, valuation was based on the results of an actuarial experience study for the period.

Changes in Actuarial Assumptions
Certain key assumptions were changed as part of the actuary's updated study. Those changes are summarized below.
• Updated medical trend rates and PEMHCA minimum increase • The City opened and has funded an additional OPEB trust with Shuster Advisory Group Discount Rate
The discount rate used to measure the total OPEB liability was 5.75 percent. The projection of cash flows used to determine the discount rate assumed that the City's contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, the fiduciary net position for the City's retiree health benefits was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on OPEB Account investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
70

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) The long-term expected rate of return on the OPEB investments was determined using a building-block method in which best -estimate ranges of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target asset allocation and most recent best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class
Global Equity
Fixed Income
TI PS
Commodities
REITs
Changes in Net OPEB Liability (Asset)
Balance at June 30, 2023
Changes in the year:

Service cost
Interest on the total OPEB liability
Actual vs. expected experience
Assumption changes
Contributions - employer
Net investment income
Benefit payments
Administrative expenses
Distribution of fiduciary assets
Target
Allocation

34.00%

41.00%

5.00%

3.00%

17.00%
100.00%
Long-term Expected
Real Rate
of Return

4.56%

1.56%
(0.08%)

1.22%

4.06%
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability (Asset)
$ 9,051,127 $ 9,796,188 $ (745,061)
275,595
523,241
170,452
641,067
(453,761)
459,025
348,850
(453,761)
(8,071)
(7,169,903)
275,595
523,241
170,452
641,067
(459,025)
(348,850)
8,071
7,169,903
Net changes 1,156,594 (6,823,860) 7,980,454
Balance at June 30, 2024 $ 10,207,721 $ 2,972,328 $ 7,235,393 71

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) Changes in the Discount Rate
The following presents the net OPEB asset of the City, as well as what the City's net OPEB liability (asset) would be if it were calculated using a discount rate that is 1 -percentage -point lower (4.75 percent) or 1 -percentage -point higher (6.75 percent) than the current discount rate:

Net OPEB Liability (Asset)
1% Decrease in
Discount Rate
(4.75%)
Discount Rate
(5.75%)
$ 8,613,330 $
Net OPEB Liability (Asset) to Changes in the Healthcare Cost Trend Rates 7,235,393
1% Increase in
Discount Rate
(6.75%)
$ 6,102,005
The following presents the net OPEB liability (asset) of the City, as well as what the City's net OPEB liability (asset) would be if it were calculated using healthcare cost trend rates that are 1 -percentage -point lower or 1 -percentage - point higher than the current healthcare cost trend rates:

Net OPEB Liability (Asset)
OPEB Plan Fiduciary Net Position
1% Decrease
Trend Rate 1% Increase
$ 5,994,043 $
7,235,393 $ 8,767,469
Detailed information about the OPEB plan's fiduciary net position is available in the separately issued CaIPERS financial reports.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2024, the City recognized OPEB expense of $491,028. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Employer contributions made subsequent to measurement date Changes in assumptions
Net difference between projected and actual earnings
on plan investments
Difference between expected and actual experience
Deferred Outflows
of Resources
Deferred Inflows
of Resources
488,925 $
802,933
900,810
139,461
175,812
509,500
2,332,129 $ 685,312
72

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 12 - Other Post Employment Benefit Plan (OPEB) (continued) The $488,925 reported as deferred outflows of resources related to contributions subsequent to the measurement date and $7,169,903 reported as deferred inflows of resources related to distribution of trust assets made subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the fiscal year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows:

Deferred
Fiscal Year Outflows/(Inflows)
Ended June 30, of Resources
2025 $ 201,807
2026 189,540
2027 523,037
2028 169,734
2029 73,774
$ 1,157,892
Note 13 - PARS and Shuster Advisory Group Section 115 Trusts In June 2018, the City Council approved the creation of a Section 115 Trust Agreement with U.S. Bank National Association and Public Agency Retirement Services (PARS), Trust Administrator. The Section 115 Trust was established as a means to set aside monies to fund the City's pension and OPEB obligations. Contributions to the Section 115 Trust are irrevocable, the assets provide benefits to plan members, and the assets are protected from creditors of the City.

The Section 115 Trusts were created to address the City's pension and OPEB obligations by accumulating assets to reduce the net pension and OPEB liability. However, in accordance with generally accepted accounting principles, the assets in the Section 115 Trusts are not considered to have present service capacity as plan assets and are therefore regarded as restricted assets of the City rather than pension and OPEB plan assets. Accordingly, the Section 115 Trusts' assets are recorded as restricted for pension and OPEB benefits in the City's Employee Benefits Internal Service Fund rather than assets of the pension and OPEB plan during the measurement of the net pension and OPEB liability. The assets held in Trust will be considered pension and OPEB plan assets at the time they are transferred out of the Trust into the pension or OPEB plan.

The balance in the PARS Trust's pension assets for the fiscal year ended June 30, 2024, was $984,352. During the fiscal year, the Trust earned $105,056 in interest income, and plan costs totaled $5,336.

The balance in the PARS Trust's OPEB assets for the fiscal year ended June 30, 2024, was $4,199,030. During the fiscal year, the Trust earned $500,907 in interest income, plan costs totaled $16,588 and had plan contributions of $3,500,000.
73

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 13 - PARS and Shuster Advisory Group Section 115 Trusts (continued) In December 2023, the City Council approved the creation of a Section 115 Trust Agreement with Shuster Advisory Group and Charles Schwab, Trust Administrator. The Section 115 Trust was established as a means to set aside monies to fund the City's OPEB obligations. Contributions to the Section 115 are irrevocable, the assets provide benefits to plan members, and the assets are protected from creditors of the City. Similar to the PARS Trust, the assets are regarded as restricted assets of the City rather than OPEB plan assets.

The balance in the Shuster Trust's OPEB assets for the fiscal year ended June 30, 2024, was $5,869,903. During the fiscal year, the Trust earned $265,003 in interest income, plan costs totaled $4,900 and had plan contributions of $5,600,000.

The restricted trust assets are as follows at June 30, 2024:

PARS — Pension
PARS — OPEB
Shuster — OPEB
$ 984,352
4,199,030
5,869,903
Total restricted assets $11,053,285
Note 14 - Risk Management
Description of Self -Insurance Pool Pursuant to Joint Powers Agreement The City of Indian Wells is a California Joint Powers Insurance Authority (Authority) member. The Authority comprises 126 California public entities and is organized under a joint powers' agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self -insured losses, purchase excess insurance or reinsurance, and arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine -member Executive Committee.

Primary Self -Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self- insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk -sharing pool.

The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence.

Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority's website: https://cjpia.org/coverage/risk-sharing-pools/ . 74

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 14 - Risk Management (continued)
Primary Workers' Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes costs incurred up to $100,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the first layer. (3) The second layer of losses includes costs incurred from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool's total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2023-24, the Authority's pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers' Compensation Law. Employer's Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer's Liability losses from $5 million to $10 million are pooled among members.

Purchased Insurance
Property Insurance
The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. The City property is currently insured according to a schedule of covered property submitted by the City to the Authority. The City property currently has all-risk property insurance protection in the amount of $126,608,574. There is a $10,000 deductible per occurrence except for non - emergency vehicle insurance which has a $2,500 deductible.

Earthquake and Flood Insurance
The City of Indian Wells purchases earthquake and flood insurance on a portion of its property. Earthquake insurance is part of the property protection insurance program of the Authority. City of Indian Wells property currently has earthquake protection in the amount of $120,891,607. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2023-24.
75

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 15 - Other Required Disclosures
Deficit Fund Balance and Net Position
The following funds reported a deficit fund balance at June 30, 2024:

Park Facilities in Lieu Capital Projects Fund
Transportation Facilities Fee Fund
Recreation Facilities Fees Fund
Citywide Public Improvement Fund
Successor Agency of the Former Redevelopment Agency Private Purpose Trust Fund $ 1,386,737
151,692
592,852
185,327
59,422,862
The deficit in the Park Facilities in Lieu Capital Projects Fund will be eliminated through Quimby Act Park fees to be collected from developers. This deficit balance is temporary although it will take several years to expunge.

The deficit in the Transportation Facilities Fee Fund will be eliminated through the collection of fees from developers. This deficit balance is temporary and is anticipated to be dissolved within the next fiscal year.

The deficit in the Recreation Facilities Fees Fund will be eliminated through the collection of fees from developers.

This deficit balance is temporary and is anticipated to be dissolved within the next fiscal year.

The deficit in the Citywide Public Improvement Fund will be eliminated through the collection of fees from developers. This deficit balance is temporary and is anticipated to be dissolved within the next fiscal year.

The deficit in the Successor Agency of the former RDA Private -Purpose Trust Fund was caused by the dissolution of the Redevelopment Agency. See Note 17 and 18 for additional information.

Note 16 - Contingencies
Various claims and suits have been filed against the City in the normal course of business. Although the outcome of these matters is not presently determinable in the opinion of legal counsel, the resolution of these matters will not have a material adverse effect on the financial condition of the City. 76

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 17 - California Redevelopment Agency Dissolution
On July 18, 2011, the California Redevelopment Association ("CRA") and the League of California Cities ("League") filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB X1 26 and 27 (California Redevelopment Association v. Matosantos). AB X1 26 dissolves redevelopment agencies effective October 1, 2011. AB X1 27 gave redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts.

On August 17, 2011, the Supreme Court issued a stay of the implementation of AB X1 26 and 27 which allowed a redevelopment agency to continue if it adopted an AB X1 27 ordinance. However, because of the effect of the stay order, the authority for the Redevelopment Agency to engage in most activities was suspended.

The Supreme Court heard oral arguments on November 10, 2011, and on December 29, 2011, announced its decision in California Redevelopment Association v. Matosantos. The court upheld AB X1 26 which dissolves redevelopment agencies but invalidated in its entirety AB X1 27 which allowed redevelopment agencies to continue as long as they made the required payments. AB X1 26 established deadlines for the process of Redevelopment Agency dissolution and the handling of existing obligations. The full text of AB X1 26 may be obtained from the California legislative information website maintained by the Legislative Counsel of the State of California at: http://www.leginfo.ca.gov/bilinfo.html .

On February 1, 2012, the Redevelopment Agency was dissolved, and the City of Indian Wells elected to become the Successor Agency. AB X1 26 provides that a successor agency is to be designated as the successor entity to the former Redevelopment Agency, vested with all authority, rights, powers, duties, and obligations previously vested with the former Agency under the Community Redevelopment Law (Health & Safety Code, § 33000 et seq.), with certain exceptions. The Successor Agency is responsible for winding down the remaining activities of the dissolved Redevelopment Agency.

The California Supreme Court decision impacted the reporting entity of the City that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provided that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the "successor agency" to hold the assets until they are distributed to other units of state and local government. On January 12, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 2012-03.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).
77

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 18 - Successor Agency Trust for Assets of the Former Redevelopment Agency Successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated. Payments for these enforceable obligations are secured from incremental tax revenues generated within the redevelopment project areas. It is essential to differentiate the Successor Agency from the City of Indian Wells, in that, the City itself has no outstanding debt or any obligation to fund Successor Agency debt.

In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private -purpose trust fund) in the financial statements of the City.

Cash and Investments
Cash and investments reported in the accompanying financial statements consisted of the following:

Cash and investments pooled with the City
Cash and investments with fiscal agent
Due to City
$ 8,088,306
590
$ 8,088,896
The amount due to the City reported in the accompanying financial statements consisted of the following:

In a letter dated November 22, 2013, from the California Department of Finance, the loan between the Successor Agency and the City of Indian Wells for $16,400,000 was determined to be for legitimate redevelopment purposes and therefore, approved as an enforceable obligation.
$ 11,600,000
78

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 18 - Successor Agency Trust for Assets of the Former Redevelopment Agency (continued) Long -Term Debt
The following debt is recorded in the Successor Agency:

Balance at
Project Area 1 July 1, 2023 Additions
2015 Refunding Tax Allocation Bonds $ 11,065,000 $
2016 A Tax Allocation Bonds 36,435,000
2020 A Tax Allocation Bonds 6,315,000
Balance at Due Within
Repayments June 30, 2024 One Year
$ 2,000,000 $ 9,065,000
960,000 35,475,000
465,000 5,850,000
$ 53,815,000 $ - $ 3,425,000 $ 50,390,000
Adjustments:

Unamortized net original issue (discount) or Premium
Net Long-term Debt
5,061,345
$ 55,451,345
A description of long-term debt outstanding of the Successor Agency as of June 30, 2024, follows:
2015 A Tax Allocation Refunding Bonds
$ 2,105,000
1,010,000
480,000
$ 3,595,000
5,061,345
On September 1, 2015, the Successor Agency issued $20,575,000 of Refunding Tax Allocation Bonds to provide funds to refund the 2005 Refunding Tax Allocation Bonds and a portion of the 2006 A Tax Allocation Bonds.

The Series 2015A Bonds are special obligations payable solely from certain payments from the Successor Agency and certain other funds.

The bonds are payable in annual installments ranging from $865,000 to $2,435,000 until maturity on September 1, 2027. Interest is payable semiannually on March 1 and September 1 of year, with rates ranging from 2.00 to

5.00 percent per annum. Bonds outstanding at June 30, 2024 were $9,065,000.

Future debt service requirements on these bonds are as follows:

Year Ending June 30, Principal
2025
2026
2027
2028
Bond Premium
$ 2,105,000
2,205,000
2,320,000
2,435,000
9,065,000
776,711
Interest Total
$ 400,625
292,875
179,750
60,875
934,125
$ 2,505,625
2,497,875
2,499,750
2,495,875
9,999,125
776,711
$ 9,841,711 $ 934,125 $ 10,775,836
79

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 18 - Successor Agency Trust for Assets of the Former Redevelopment Agency (continued) 2016 A Tax Allocation Refunding Bonds
On September 1, 2016, the Successor Agency issued $37,470,000 in Series 2016A Tax Allocation Refunding Bonds to provide funds to refund the 2006 A Tax Allocation Bonds.

The Series 2016A Bonds are special obligations payable solely from certain payments from the Successor Agency and certain other funds.

The bonds are payable in annual installments ranging from $515,000 to $5,050,000 until maturity on September 1, 2034. Interest is payable semiannually on March 1 and September 1 of year, with rates ranging from 4.00 to

5.00 percent per annum. Bonds outstanding at June 30, 2024 were $35,475,000.

Future debt service requirements on these bonds are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 1,010,000 $ 1,615,100 $ 2,625,100
2026 1,055,000 1,563,475 2,618,475
2027 1,110,000 1,509,350 2,619,350
2028 1,165,000 1,452,475 2,617,475
2029 3,880,000 1,326,350 5,206,350
2030-2034 22,205,000 3,792,125 25,997,125
2035 5,050,000 126,250 5,176,250
Bond Premium
35,475,000
11,385,125 46,860,125
4,284,634 - 4,284,634
$ 39,759,634 $ 11,385,125 $ 51,144,759
2020 A Tax Allocation Refunding Bonds
On June 12, 2020, the Successor Agency issued $7,220,000 in Series 2020A Tax Allocation Refunding Bonds to refund the 2010 A Tax Allocation Bonds.

The Series 2020A Bonds are special obligations payable solely from certain payments from the Successor Agency and certain other funds.

The bonds are payable in annual installments ranging from $450,000 to 590,000 until maturity on September 1, 2034. Interest is payable semiannually on March 1 and September 1 of year, with rates ranging from 4.00 to 5.00 percent per annum. Bonds outstanding at June 30, 2024 were $5,850,000. 80 Page 115 of 530

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 18 - Successor Agency Trust for Assets of the Former Redevelopment Agency (continued) These bonds resulted in a full defeasance of the 2010A Tax Allocation Bonds, and the related liability has been removed from the financial statements of the City. The refunding resulted in a deferred loss of $28,936, which represents the difference between the defeased bonds, and the amount placed in escrow. The advanced refunding also resulted in future cash flow savings of approximately $2,974,000 and an economic gain (difference between the present value of the debt service payments on the old and new debt) of approximately $2,000,000.

Future debt service requirements on these bonds are as follows:

Year Ending June 30, Principal Interest Total
2025 $ 480,000 $ 120,615 $ 600,615
2026 490,000 110,188 600,188
2027 500,000 99,545 599,545
2028 505,000 88,741 593,741
2029 515,000 77,776 592,776
2030-2034 2,770,000 214,678 2,984,678
2035 590,000 6,343 596,343
$ 5,850,000 $ 717,886 $ 6,567,886
Insurance
The Successor Agency of the former redevelopment agency is covered under the insurance policy of the City of Indian Wells at June 30, 2024.

Commitments and Contingencies
The Successor Agency is subject to litigation arising in the normal course of business. In the opinion of the legal counsel there is no pending litigation, which is likely to have a material adverse effect on the financial position of the Successor Agency.

Note 19 - Prior Period Adjustment
The City implemented GASB 101: Compensated Absences during the fiscal year. This adjustment recognized vacation and sick leave (and applicable payroll taxes) that has not been used but is more likely than not to be used or settled in the future.

Governmental Business -type
Activities Activities
Beginning net position, as previously reported
Additional compensated absences liability
Beginning net position, as restated
$ 249,998,065 $ 42,064,327
(165,665) (121,668)
$ 249,832,400 $ 41,942,659
81

City of Indian Wells, California
Notes to Financial Statements
June 30, 2024
Note 19 - Prior Period Adjustment (continued)
The City implemented GASB 100: Accounting Changes and Error Corrections — an Amendment of GASB Statement No. 62 which requires the City to report any changes in the presentation of the reporting of major funds. The City no longer reports the Indian Wells Financing Authority Debt Service fund as a major fund as it no longer meets the requirements of a major fund.
82

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83

City of Indian Wells, California
Required Supplementary Information
June 30, 2024
Required Supplementary Information
The Schedule of Proportionate Share of Net Position Liability in accordance with GASB 68. The Schedule of Plan Contributions in accordance with GASB 68. The Schedule of Changes in the Net OPEB Liability in accordance with GASB 75. The Schedule of OPEB Contributions in accordance with GASB 75.

General Fund
This fund has been classified as a major fund and is used to account for resources traditionally associated with government which are not required legally or by sound fiscal management to be accounted for in another fund.

Special Revenue Funds
The Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for a particular purpose. The following funds have been classified as major funds and budget -actual comparisons for these funds have been presented in the accompanying financial statements as required supplementary information.

Housing Authority - This fund is used to account for the housing activity of the former Redevelopment Agency for the benefit of providing low- and moderate -income housing in Indian Wells. The Housing Authority was created to promote and encourage the retention, rehabilitation, and development of affordable housing units.

Emergency Services Upgrade —This fund is used to accumulate the resources accruing from a special fire tax levied to provide enhancement levels of fire protection, suppression, and emergency paramedic services. 84

City of Indian Wells, California
Schedule of the City's Proportionate Share of the Net Pension Liability - Miscellaneous Plan Last 10 Fiscal Years
Measurement period
2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 Plan's proportion of the net pension liability 0.0017% 0.0017% 0.0017% -0.0072% -0.0119% 0.0008% 0.0154% 0.0480% 0.0695% 0.1456% Plan's proportionate share of the net pension liability (asset) $ (1,089,114) $ (700,736) $ (6,449,180) $ (781,863) $ (1,218,808) $ 73,946 $ 1,526,915 $ 4,152,019 $ 4,769,476 $ 3,597,324 Plan's covered payroll $ 3,529,517 $ 3,241,802 $ 3,207,039 $ 3,038,144 $ 2,889,192 $ 2,943,396 $ 2,812,372 $ 2,902,571 $ 2,814,500 $ 2,673,595 Plan's proportionate share of the net pension liability (asset) as a percentage of covered payroll -30.86% -21.62% -201.09% -25.73% -42.19% 2.51 % 54.29% 143.05% 169.46% 134.55% Plan's fiduciary net position as a percentage of the total pension liability
Notes to Schedule:

Benefit changes

77.97% 78.19% 90.49% 77.71% 75.30% 75.30% 73.31% 74.06% 78.40% 79.82% There were no changes to benefit terms that applied to all members of the Public Agency Pool. However, individual employers in the Plan may have provided a benefit improvement to their employees such as Golden Handshakes, service purchases, and other prior service costs. Employers that have done so may need to report this information as a separate liability in their financial statement as CaIPERS considers such amounts to be separately financed employer -specific liabilities.

These employers should consult with their auditors. Additionally, the figures above do not include any liability impact that occurred after the June 30, 2022 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. For pooled plans this is a Class 3 benefit and there is no normal cost surcharge. The impact on the unfunded liability is included in the pool's differences between expected and actual experience.

Changes in assumptions
There were no assumption changes in 2023. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CaIPERS took into account long-term market return expectations as well as the expected pension fund cash flow. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CaIPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates June 30, 2017 through June 30, 2021, 7.65% for measurement dates June 30, 2015 through June 30, 2016, and 7.50% for measurement date June 30, 2014.
85

City of Indian Wells, California
Schedule of Plan Contributions - Miscellaneous Plan
Last 10 Fiscal Years
Fiscal Year
Actuarially determined contributions
Contributions in relation to the actuarially
determined contributions
Contribution deficiency (excess)
Covered payroll
Contributions as a percentage of covered
payroll
Notes to Schedule
Fiscal Year: June 30, 2024
Valuation Date: June 30, 2021
2023-24
2022-23
$ 502,145 $
(1,124,057)
$ (621,912) $
2021-22
2020-21 2019-20
452,975 $ 408,794 $
(1,390,856)
(937,881) $
2018-19
2017-18 2016-17
2015-16 2014-15
455,250 $ 475,302 $ 430,310 $ 974,198 $ 544,107 $ 566,489 $ (1,300,007) (428,319)
(891,213) $ 26,931 $
$ 3,694,552 $ 3,529,517 $ 3,241,802 $ 3,207,039 $

30.42%
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Projected salary increases
Discount rate

39.41%

40.10%
(428,319) (358,582) (1,334,875) (3,731,723) (2,566,489) (455,850) 46,983 $ 71,728 $ (360,677) $ (3,187,616) $ (2,000,000) $ (455,850) 3,038,144 $ 2,889,192 $ 2,943,396 $ 2,812,372 $ 2,902,571 $ 2,814,500

13.36% 14.10%

12.41% 45.35% 132.69% 88.42% 16.20%
Entry Age Actuarial Cost Method
Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing.

Market Value of Assets

2.30%
Varies by category, entry age and duration of service.

6.90% (net of investment and administrative expenses)
86

City of Indian Wells, California
Schedule of Changes in the Net OPEB Liability and Related Ratios Last Ten Fiscal Years*
Measurement Period
Total OPEB liability
Service cost
Interest on the total OPEB liability
Changes of benefit terms
Differences between expected and actual experience
Changes of assumptions
Benefit payments, including refunds of member contributions Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
OPEB fiduciary net position
Contributions - employer
Net investment income
Benefit payments, including refunds of member contributions Administrative expense
Distribution of fiduciary assets'
Net change in plan fiduciary net position
Plan fiduciary net position - beginning
Plan fiduciary net position - ending (b)
Plan net OPEB liability (asset) - ending (a) - (b)
Plan fiduciary net position as a percentage
of the total OPEB Liability
2022-23
2021-22 2020-21
2019-20
$ 275,595 $ 282,966 $ 259,910 $
523,241 498,483 576,779
(15,495)
170,452 - (1,204,273)
641,067 (279,230) 658,095
(453,761) (462,932) (463,466
1,156,594 39,287 (188,450)
9,051,127 9,011,840 9,200,290
$ 10,207,721 $ 9,051,127 $ 9,011,840
$ 459,025 $ 466,353 $
348,850 (1,409,406)
(453,761) (462,932)
(8,071) (6,254)
(7,169,903) -
2018-19 2017-18
2016-17
252,340 $ 323,517 $ 314,094 $ 305,000
554,551 513,612 485,756 459,000
239,406
71,328 - -
(454,170) (389,144) (338,000) (331,000)
352,721 758,719 461,850 433,000
8,847,569 8,088,850 7,627,000 7,194,000
$ 9,200,290 $ 8,847,569 $ 8,088,850 $ 7,627,000
677,553 $ 1,190,919 $ 389,962 $ 607,000 $ 614,000
1,830,412 448,019 524,434 423,619 459,000
(463,466) (454,170) (389,144) (338,000) (331,000)
(5,590) (5,115) (2,424) (13,582) (4,000)
(6,823,860) (1,412,239) 2,038,909 1,179,653 522,828 679,037 738,000 9,796,188 11,208,427 9,169,518 7,989,865 7,467,037 6,788,000 6,050,000 2,972,328 9,796,188 11,208,427 9,169,518 7,989,865 7,467,037 6,788,000 $ 7,235,393 $ (745,061) $ (2,196,587) $ 30,772 $ 857,704 $ 621,813 $ 839,000

29.12% 108.23% 124.37% 99.67% 90.31% 92.31% 89.00%
Covered -employee payroll $ 4,310,233 $ 3,707,177 $ 3,666,820 $ 3,451,419 $ 3,263,961 $ 3,407,217 $ 3,237,969 Plan net OPEB liability (asset) as a percentage
of covered -employee payroll 167.87%
-20.10% -59.90%

0.89%
* Fiscal Year 2017-18 was the first year of implementation; therefore, only seven years of information are shown.

Fiduciary assets were transferred to the PARS and Shuster Section 115 trusts that are irrevocably restricted for payment of OPEB benefits

26.28%

18.25%

25.91%
87

City of Indian Wells, California
Schedule of OPEB Contributions
Last Ten Fiscal Years*
Fiscal Year 2023-24
Actuarially determined contribution (ADC)
Contributions in relation to the ADC
Contribution deficiency (excess)
2022-23 2021-22
2020-21 2019-20
2018-19 2017-18
$ - $ - $ 422,001 $ 411,874 $ 354,000 $ 607,000 $ 614,000 (488,925) (459,025) (386,181) (677,553) (1,190,919) (389,962) (573,377) $ (488,925) $ 459,025) $ 35,820 $ (265,679) $ (836,919) $ 217,038 $ 40,623 Covered employee payroll" $ 4,310,233 $ 4,176,150 $ 3,707,177 $ 3,666,820 $ 3,451,419 $ 3,263,961 $ 3,407,217 Contributions as a percentage of covered
employee payroll
Notes to Schedule
Actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2023-24 were from the June 30, 2023 actuarial valuation report.

Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method
Asset valuation method
Inflation
Healthcare cost trend rates
Investment rate of return
Retirement age
Mortality

11.34% 10.99% 10.42% 18.48% 34.51% 11.95% 16.83%
Entry Age Normal Cost Method
Level percent of payroll
Investment gains and losses spread over 5 -year rolling period

2.5% annually
Non -Medicare - 8.5% for 2025, decreasing to an ultimate

3.45% in 2076 and later years

5.75%
55 CaIPERS 2000-2019 experience study
Fiscal Year 2017-18 was the first year of implementation; therefore, only seven years of information are shown. ** Contributions are made on an ad hoc basis.
88

City of Indian Wells, California
Budgetary Comparison Schedule - General Fund
Year Ended June 30, 2024
Revenues
Taxes
Licenses and permits
Intergovernmental
Charges for services
Investment income (loss)
Fines and forfeitures
Other income
Total revenues
Expenditures
Current
General government
Public safety
Community development
Public works
Total expenditures
Budgeted Amounts
Original Final
$ 20,523,851
911,170
806,030
677,978
470,000
48,429
200,160
23,637,618
9,364,142
5,865,594
2,205,760
3,364,947
20,800,443
$ 20,523,851
911,170
806,030
677,978
470,000
48,429
200,160
23,637,618
11,005,486
5,270,094
2,197,260
3,182,747
21,655,587
Actual
$ 24,526,087
683,169
942,282
666,372
1,404,591
64,546
31,117
28,318,164
10,405,052
4,854,763
2,078,322
2,914,979
20,253,116
Variance with
Final Budget
Positive
(Negative)
$ 4,002,236
(228,001)
136,252
(11,606)
934,591
16,117
(169,043)
4,680,546
600,434
415,331
118,938
267,768
1,402,471
Other financing sources (uses)
Transfers out (4,322,464) (4,322,464) (3,425,053) 897,411 Total other financing sources (uses) (4,322,464) (4,322,464) (3,425,053) 897,411 Net change in fund balance (1,485,289) (2,340,433) 4,639,995 6,980,428 Fund balance, beginning 36,648,058 36,648,058 36,648,058 - Fund balance, ending $ 35,162,769 $ 34,307,625 $ 41,288,053 $ 6,980,428 See Notes to Required Supplementary Information
89

City of Indian Wells, California
Budgetary Comparison Schedule - Housing Authority Special Revenue Fund Year Ended 30, 2024
Revenues
Intergovernmental
Investment income (loss)
Total revenues
Expenditures
Current
General government
Community development
Total expenditures
Other financing sources (uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ - $ - $ 113,172 $ 113,172
144,000 144,000 434,381 290,381
144,000 144,000
547,553 403,553
3,888,360 7,808,574 3,404,143
250,000 250,000 250,000
4,138,360 8,058,574
4,404,431
3,654,143 4,404,431
517,440 517,440 517,445 5
(86,855) (86,855) (806,269) (719,414)
430,585 430,585
(3,563,775) (7,483,989)
15,429,469 15,429,469
(288,824) (719,409)
(3,395,414) 4,088,575
15,429,469 -
$ 11,865,694 $ 7,945,480 $ 12,034,055 $ 4,088,575
See Notes to Required Supplementary Information
90

City of Indian Wells, California
Budgetary Comparison Schedule - Emergency Services Upgrade Special Revenue Fund Year Ended June 30, 2024
Revenues
Taxes
Charges for services
Investment income (loss)
Assessments
Other income
Total revenues
Expenditures
Current
Public safety
Capital outlay
Total expenditures
Other financing sources (uses)
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning
Fund balance, ending
Budgeted Amounts
Original Final
Actual
Variance with
Final Budget
Positive
(Negative)
$ 4,474,565 $ 4,474,565 $ 4,206,481 $ (268,084)
650,000 650,000 737,398 87,398
115,000 115,000 207,355 92,355
646,000 646,000 610,241 (35,759)
9,000 9,000 21,171 12,171
5,894,565 5,894,565
5,782,646 (111,919)
4,943,718 4,971,418 5,350,057 (378,639)
475,000 1,175,000 29,297 1,145,703
5,418,718 6,146,418
(144,758) (144,758)
(144,758) (144,758)
331,089 (396,611)
4,472,536
5,379,354 767,064
(146,616) (1,858)
(146,616) (1,858)
256,676 655,145
4,472,536 4,472,536
$ 4,803,625 $ 4,075,925 $ 4,729,212 $ 655,145
See Notes to Required Supplementary Information
91

City of Indian Wells, California
Notes to Required Supplementary Information
June 30, 2024
Note 1- Budgets and Budgetary Accounting
The City follows these procedures in establishing the budgetary data reflected in the basic financial statements:

1. In June, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted at public workshops and City Council meetings to obtain taxpayer comments.

3. Prior to July 1, the budget is adopted by Council action.

Formal budgetary integration is employed as a management control device during the year. The City presents a comparison of annual budgets to actual results for all governmental funds. Budgeted revenue amounts represent the original budget modified by Council -authorized adjustments during the year which were contingent upon new or additional revenue sources. Budgeted expenditure amounts represent original appropriations adjusted for supplemental appropriations during the year. Budgets are prepared in accordance with accounting principles generally accepted in the United States of America, using the modified -accrual basis of accounting.

The Finance Director is authorized by City Council to transfer any amounts within a fund between administrative control accounts, as well as budget adjustments between departments and programs within a fund. The transfer of appropriations between funds or between capital projects in the capital budget must be approved by City Council. Any subsequent appropriations of additional amounts of moneys for the fiscal year ended June 30, 2024, shall be approved by the City Council in advance of any authorization to purchase services or goods; with the exception that the City Manager may appropriate funds under the emergency provision of State Law to effect repairs or make acquisitions to protect life and property of the City.

All appropriations for prior fiscal year shall lapse at the end of the fiscal year and any remaining amounts shall be credited to their respective fund balances, with the exception of any unexpected amounts deemed necessary by the Finance Director for specific orders or encumbrances outstanding at the end of the year, and any unexpected appropriations for uncompleted capital projects in the capital budget at the end of the year. These amounts shall be charged against the incumbent fiscal year operating budget, as directed by the Finance Director. 92

City of Indian Wells, California
Notes to Required Supplementary Information
June 30, 2024
Note 1- Budgets and Budgetary Accounting (continued)
The following funds had expenditures in excess of appropriations for the year ended June 30, 2024:

Excess Over
Final Budget Actual Appropriation
Measure "A" Transportation Fund $ 295,000 336,736 (41,736) Citizens Option for Public Safety Program Fund $ 182,000 198,063 (16,063) Gas Tax Fund $ 255,175 358,389 (103,214)
Solid Waste Fund $ 1,227,633 1,560,601 (332,968)
Affordable Housing Operations Fund $ 2,850,000 3,144,912 (294,912) The Indian Wells Financing Authority Debt Service Fund and the Storm Drain Facilities Fees Fund were not included in the appropriated budget prepared for fiscal year ended June 30, 2024. Therefore, no budgetary to actual comparison schedule for these funds is presented.
93

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94

City of Indian Wells, California
Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2024
Special Revenue Funds
The following Special Revenue funds have been classified as other governmental funds in the accompanying financial statements.

Traffic Safety — This fund is used to account for the revenue from traffic fines and forfeitures and used to pay the costs of issuing tickets.

Public Safety %z% Tax — This fund is used to account for the half -cent sales tax collected by the State of California and allocated to the City for public safety.

Measure "A" Transportation — This fund is used to account for the City's allocation of the sales tax increase, one- half cent, authorized by the Riverside County residents within November 1988. The funds collected are divided into four categories: Regional Transportation board (40%) administered by the Coachella Valley Association of Governments (CVAG), Sunline Transit (10%), State Highways (15%), and local agencies (35%). The local share is based 50% on population and 50% on point -of -sale. The local monies are legally restricted for the acquisition, construction and improvements of the public streets.

Fire Access Maintenance District No. 1 —This fund is used to account for the accumulation of special assessments, ad valorem taxes and other revenues accruing to the benefit and for expenses of the special district referred to as the Fire Access Maintenance District No. 1.

South Coast Air Quality Management District Vehicle Registration — This fund is used to account for the City's share of vehicle registration fees that the State of California has allocated to address air quality concerns in California. These monies are to be used in air quality maintenance programs locally.

Citizens Option for Public Safety Program —This fund is used for front line municipal police services including anti - gang and community crime prevention programs.

Gas Tax — This fund is used to account for the City's share of motor vehicle gas tax imposed under the provisions of the Street and Highway Code of the State of California under Sections 2105, 2106, 2107 and 2107.5 which are legally restricted for the acquisition, construction, improvement, and maintenance of public streets.

AB 939 Recycling — This fund is used to account for the revenues and expenditures incurred in recycling.

Solid Waste — This fund is used to account for city-wide assessment revenues and related expenditures incurred in providing residential garbage and refuse collection to the various benefiting assessment districts.

Consolidated LLMD —This fund is used to account for the revenues and expenditures incurred in providing lighting and landscaping maintenance services to the various benefiting assessment districts.

Street Lighting District 2001-1 — This fund is used to account for the revenues and expenditures incurred in providing lighting maintenance services within the City.

Affordable Housing Operations —This fund is used to account for revenues and expenditures associated with the retention and development of affordable housing units.
95

City of Indian Wells, California
Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2024
Debt Service Funds
The following Debt Service Funds have been classified as other governmental funds in the accompanying financial statements:

Indian Wells Financing Authority Fund —This fund was created in 2022 to account for the issuance and debt service payments for the 2022 Solar and Infrastructure Lease Revenue Bonds.

Capital Projects Funds
The following Capital Projects Funds have been classified as other governmental funds in the accompanying financial statements:

Hwy 111 Circulation Im Drovement —This fund accounts for fees collected from projects, which will create adverse impacts on the existing public facilities. It will finance future projects to mitigate the traffic impact.

Park Facilities Fees — This fund accounts for the accumulated fees collected to fund the park facilities needed to serve new development. It is a fee -in -lieu of land dedication charged under the Quimby Act to new residential development occurring in a subdivision.

Transportation Facilities Fees — This fund accounts for the accumulation of fees collected to fund transportation facilities needed to serve new development to fund capacity -expanding transportation projects. This fee replaces the Highway 111 Circulation Improvement Fee.

Storm Drain Facilities Fees — This fund accounts for the accumulated fees collected to fund storm drain facilities needed to serve new development.

Recreation Facilities Fees — This fee accounts for the accumulation of fees collected to fund recreation facilities needed to serve new development. As new development occurs, the City will need to make additional, capacity - expanding improvements to the golf course as demand for use of the facility increases.

Citywide Public Improvement — This fund is used to account for the accumulation of resources from the citywide public improvement fee for the acquisition and construction of general government capital projects.

Art in Public Places —This fund is used to account for fees collected through the building permit process to support art in public places with the community. The program supports arts and culture throughout the City.

Bridges Capital Reserve — This fund establishes reserve funding for bridges in the City.

Building Capital Reserve — This fund establishes reserve funding for the City's assets in and around the City's Civic Center complex. These assets include City Hall, the Fire Station, Emergency Operations Command, and surrounding Public Works facilities.

Medians & Parkways Capital Reserve — This fund establishes reserve funding for medians and parkways throughout the City.
96

Storm Drains Ca Dital Reserve — This fund establishes reserve funding for storm drains throughout the City. Funding is for construction and preventative maintenance of storm drains to extend roadway infrastructure.

Traffic Signals Capital Reserve — This fund establishes reserve funding for traffic signals throughout the City.

Technology Capital Reserve — This fund establishes reserve funding for citywide information technology.

City Vehicles Capital Reserve — This fund establishes reserve funding for the purchase and replacement of City vehicles and fleet. Vehicles and fleet are to be replaced as needed to reduce the cost of ongoing maintenance costs.

Disaster Recovery Reserve — This reserve sets aside funds for the initial stages of disaster recovery prior to the inclusion of County, State, and Federal funding. Reserve funds allow for immediate response and recovery under a range of domestic emergencies like floods or earthquakes. The funds are earmarked, remain unspent if not used for disaster recovery, and cannot be used for any other purpose. 97

City of Indian Wells, California
Combining Balance Sheet - Nonmajor Governmental Funds
June 30, 2024
Assets
Cash and investments
Restricted cash and investments
Receivables
Accounts
Accrued interest
Prepaid costs
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable
Accrued liabilities
Deposits payable
Due to other funds
Total liabilities
Deferred Inflow of Resources
Unavailable revenue
Fund Balances
Nonspendable
Prepaid costs
Restricted for
Community development
Public safety
Public works
Debt service
Committed to
Capital projects
Assigned
Capital projects
Unassigned
Total fund balances
Debt Service
Funds
Special Revenue Funds
Citizens
Indian Wells Fire Access South Coast Option for
Financing Public Safety Measure "A" Maintenance AQMD Vehicle Public Safety Authority Traffic Safety 1/2% Tax Transportation District No. 1 Registration Program Gas Tax
AB 939
Recycling Solid Waste
$ 1 $ 11,893 $ 6,976 $
6,275,928
1,269,095 $
17,889 $
3,039 2,861 58,900 41,670 1,606
46 27 - 4,918 69
537
25Q469 $ 93,563
21,615 8,096
6 59,516
1,333
$ 6,275,929 $ 14,978 $ 9,864 $ 58,900 $ 1,316,220 $ 19,564 $ $ 23,132 $ 258,565 $ 154,412
- $ $ - $ - $ 190,822 $ 1,244 $
$ $ 536 $ 35,111
- 1,645 1,650
190,822 1,244
2,181 36,761
24,405
537
9,864 - 1,124,861
14,978 58,900
6,275,929
18,320 23,132
256,384 93,246
6,275,929 14,978
9,864 58,900
1,125,398 18,320
23,132
256,384 93,246
Total. Liabilities and Fund Balances $ 6,275,929 $ 14,978 $ 9,864 $ 58,900 $ 1,316,220 $ 19,564 $ $ 23,132 $ 258,565 $ 130,007
98

City of Indian Wells, California
Combining Balance Sheet - Nonmajor Governmental Funds
.June 30, 2024
Special Revenue Funds Capital Projects Funds
Affordable Hwy 11.1 Transportation Recreation Citywide
Consolidated Street Lighting Housing Circulation Park Facilities Facilities Facilities Public Art in Public LLMD District 2001-1 Operations Improvement Fees Fees Fees Improvement Places Assets
Cash and investments
Restricted cash and investments
Receivables
Accounts
Accrued interest
Prepaid costs
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable
Accrued liabilities
Deposits payable
Due to other funds
Total liabilities
Deferred Inflow of Resources
Unavailable revenue
Fund Balances
Nonspendable
Prepaid costs
Restricted for
Community development
Public safety
Public works
Debt service
Committed to
Capital projects
Assigned
Capital projects
Unassigned
Total fund balances
$ 2,290,881 $ 19,533 $ 1,103,319 $ 38,568 $
49,000
8,876
76 233,730
4,275
149
$ - $
$ 798,508
3,094
$ 2,348,757 $ 19,609 $ 1,341,324 $ 38,717 $
$ $ $
$ 801,602
$ 377,441 $
$ 264,420 $
131,105
151,692 592,852
185,327
377,441 395,525
151,692 592,852
185,327
945,799
1,971,316 19,609 38,717
(151,692) (592,852- ) (185,327- )
801,602
1,971,316 19,609 945,799 38,717 (151,692) (592,852) (185,327) 801,602
Total. Liabilities and Fund Balances $ 2,348,757 $ 19,609 $ 1,341,324 $ 38,717 $ $ $ $ $ 801,602
99

City of Indian Wells, California
Combining Balance Sheet - Nonmajor Governmental Funds
.June 30, 2024
Capital Projects Funds
Medians & Total
Bridges Buildings Parkways Storm Drains Traffic Signals Technology City Vehicles Disaster Nonmajor Capital Capital Capital Capital Capital Capital Capital Recovery Governmental Reserve Reserve Reserve Reserve Reserve Reserve Reserve Reserve Funds Assets
Cash and investments
Restricted cash and investments
Receivables
Accounts
Accrued interest
Prepaid costs
Total assets
Liabilities and Fund Balances
Liabilities
Accounts payable
Accrued liabilities
Deposits payable
Due to other funds
$ 2,026,876 $ 2,235,115 $ 1,647,852 $ 915,844 $ 782,113 $ 728,873 $ 297,056 $ 458,676 $ 14,994,611 7,854 8,661
6,385 3,549
2,545 2,824
6,509,658
246,303
1,637 1,777 58,101
537
$ 2,034,730 $ 2,243,776 $ 1,654,237 $ 919,393 $ 784,658 $ 731,697 $ 298,693 $ 460,453 $ 21,809,210 $ - $
$ $
- $ - $
869,574
3,295
131,105
929,871
Total liabilities - - - 1,933,845
Deferred Inflow of Resources
Unavailable revenue
Fund Balances
Nonspendable
Prepaid costs
Restricted for
Community development
Public safety
Public works
Debt service
Committed to
Capital projects
Assigned
Capital projects
Unassigned
Total fund balances
Total Liabilities and Fund Balances
24,405
537
945,799
1,134,725
2,494,602
6,275,929
801,602
2,034,730 2,243,776 1,654,237 919,393 784,658 731,697 298,693 460,453 9,127,637 - - - - - - - (929,871)
2,034,730 2,243,776 1,654,237 919,393 784,658 731,697 298,693 460,453 19,850,960 $ 2,034,730 $ 2,243,776 $ 1,654,237 $ 919,393 $ 784,658 $ 731,697 $ 298,693 $ 460,453 $ 21,784,805 100

City of Indian Wells, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Year Ended June 30, 2024
Revenues
Taxes
Intergovernmental
Investment income (loss)
Fines and forfeitures
Rental income
Assessments
Developer fees
Other income
Total revenues
Expenditures
Current
General government
Public safety
Community development
Public works
Capital outlay
Debt service
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (Deficiency) of Revenues
over (under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing
sources (uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Debt Service
Funds
Special Revenue Funds
Indian Wells
Financing
Authority
Public Safety Measure "A"
Traffic Safety 1/2% Tax Transportation
Fire Access
Maintenance
District No. 1
South Coast
AQMD Vehicle
Registration
Citizens
Option for
Public Safety
Program
Gas Tax
AB 939
Recycling Solid Waste
356,346
531
21,809
37,007
282
328,216
378
$ 427,657
17,315
64,429
1,213,819
2,820
$ $ - $
6,422 186,159
651 454
256,469
(3,493)
138,366
17,286
1,495,893
356,346
22,340
37,289
328,594
1,726,040
7,073
186,613
252,976
138,366
1,513,179
17,500
470,000
466,445
35,750
336,737
1,522,376
770,248
2,335
198,063
223,403
134,986
199,358
1,560,602
936,445
17,500
35,750
336,737
2,292,624
2,335
198,063
358,389
199,358
1,560,602
(580,099)
4,840
1,539
(8,143)
(566,584)
4,738
(11,450)
(105,413)
(60,992)
(47,423)
977,439
(4,843,037)
(3,865,598)
(4,445,697) 4,840
10,721,626 10,138
1,539 (8,143) (566,584) 4,738 (11,450) (105,413) (60,992) (47,423) 8,325 67,043 1,691,982 13,582 11,450 128,545 317,376 140,669 $ 6,275,929 $ 14,978 $
9,864 $ 58,900 $ 1,125,398 $ 18,320 $ - $ 23,132 $ 256,384 $ 93,246 101

City of Indian Wells, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Year Ended June 30, 2024
Special Revenue Funds Capital Projects Funds
Affordable Hwy 111 Transportation Recreation Citywide
Consolidated Street Lighting Housing Circulation Park Facilities Facilities Facilities Public Art in Public LLMD District 2001-1 Operations Improvement Fees Fees Fees Improvement Places Revenues
Taxes
Intergovernmental
Investment income (loss)
Fines and forfeitures
Rental income
Assessments
Developer fees
Other income
99,846
1,542,190
$
$ - $
767 58,149 1,418
2,234
2,609,379
$
(84)
30,294
10,264 63,862 107,966 24,363 277,153
Total revenues 1,642,036
Expenditures
Current
General government
Public safety
Community development
Public works
Capital outlay
Debt service
Principal retirement
Interest and fiscal charges
3,001 2,667,528
1,418 10,180
63,862 107,966 24,363 307,447
3,144,912
1,389,541 186 -
Total expenditures 1,389,541
Excess (Deficiency) of Revenues
over (under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing
sources (uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
186 3,144,912
252,495 2,815 (477,384) 1,418 10,180 63,862 107,966 24,363 307,447 105,024 - 718,299 - -
(31,083) (151,926) (439,002) (151,925)
105,024 718,299 - (31,083) (151,926) (439,002) (151,925) 357,519 2,815 240,915 1,418 (20,903) (88,064) (331,036) (127,562) 307,447 1,613,797 16,794 704,884 37,299 20,903 (63,628) (261,816) (57,765) 494,155 $ 1,971,316 $ 19,609 $ 945,799 $ 38,717 $ - $ (151,692) $ (592,852) $ (185,327) $ 801,602 102

City of Indian Wells, California
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds Year Ended June 30, 2024
Capital Projects Funds
Medians & Total
Storm Drains Bridges Buildings Parkways Traffic Signals Technology City Vehicles Disaster Nonmajor Capital Capital Capital Capital Capital Capital Capital Recovery Governmental Reserve Reserve Reserve Reserve Reserve Reserve Reserve Reserve Funds Revenues
Taxes
Intergovernmental
Investment income (loss)
Fines and forfeitures
Rental income
Assessments
Developer fees
Other income
$ - $ - $ - $ - $ - $ - $ - $ - $ 427,657
831,588
34,321 75,185 82,842 61,247 28,918 27,445 12,052 17,457 966,721 21,809
2,609,379
4,392,502
483,608
2,820
Total revenues 34,321 75,185 82,842 61,247 28,918 27,445 12,052 17,457 9,736,084 Expenditures
Current
General government
Public safety
Community development
Public works
Capital outlay
Debt service
Principal retirement
Interest and fiscal charges
223,403
1,756,189
3,144,912
3,641,245
770,248
470,000
466,445
Total expenditures - - - - - - 10,472,442
Excess (Deficiency) of Revenues
over (under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing
sources (uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
34,321 75,185 82,842 61,247 28,918 27,445 12,052 17,457 (736,358) 162,500 162,500 162,500 162,500 162,500 162,500 162,500 150,000 3,088,262 (5,616,973)
162,500 162,500 162,500 162,500 162,500 162,500 162,500 150,000 (2,528,711) 196,821 237,685 245,342 223,747 191,418 189,945 174,552 167,457 (3,265,069) 722,572 1,797,045 1,998,434 1,430,490 593,240 541,752 124,141 292,996 23,116,029 $ 919,393 $ 2,034,730 $ 2,243,776 $ 1,654,237 $ 784,658 $ 731,697 $ 298,693 $ 460,453 $ 19,850,960 103

City of Indian Wells, California
Budgetary Comparison Schedule - IWFA Debt Service Fund
Year Ended June 30, 2024
Revenues
Investment income
Budgeted
Amounts
Actual
Variance with
Budget
Positive
(Negative)
$ 175,000 $ 356,346 $ 181,346
Total revenues 175,000
Expenditures
Debt service
Principal retirement
Interest and fiscal charges
500,550
Total expenditures 500,550
Other financing sources (uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net change in fund balance
Fund balance, beginning
Fund balance, ending
356,346 181,346
470,000 (470,000)
466,445 34,105
936,445 (435,895)
965,050 977,439
(7,375,782) (4,843,037)
(6,410,732) (3,865,598)
12,389
2,532,745
2,545,134
(6,736,282) (4,445,697) 2,290,585
10,721,626 10,721,626 -
$ 3,985,344 $ 6,275,929 $ 2,290,585
104